I don't think you can bring the old behaviour back without adapting source code. However, clicking wise, the current behaviour is not that bad. As before, you need three clicks to launch a file/document with another application. The only difference is that the last step is a double-click rather than a single click. Yes, rather than clicking the application and then the "Select" button, you can double-click the application.
The first time, the "Recommended Applications" dialog will be empty. However, that list gets populated with the applications you designate. So in your case, "Text Editor" (gedit) and "Libreoffice Writer" will make it to that list. You select the program with a double click, whereas with the previous approach of the submenu, it would have been a single click.
Personally, I like the interface better, because the program icons are presented in a larger size and the dialog is not prone to closing when you hover the mouse a bit in the wrong direction.
Alternatively, you may workaround with nautilus script, but this is not sensitive to the file that you selected.
As a third option, you can configure fully context sensitive right-click menu items with the third party application nautilus-actions. Installation may nowadays be less straightforward, and if you get it working properly, you will face some learning curve. It is powerful but also a bit complex.