The IO cannot be selected as GPIO by CyU3PDeviceConfigureIOMatrix call because it is part of the GPIF IOs. Try doing a GPIO Override followed by GPIOSetsimpleconfig or GPIOsetcomplexconfig based on your application.
Refer to the cyfxgpioapp example projects in the SDK (firmware -->serialif examples) to get a reference for the same.
I used CyFx3DevIOSelectGpio() followed by CyU3PGpioSetSimpleConfig(). Thanks.