The answer is a bit more complicated. Yes, she was contracted to play Psylocke in the X-Men sequel. However, she did have a previous commitment to film Predator. Studios largely try to cooperate where they can in regards to actor's commitments. In this instance, the role of Psylocke was just about as you see Selene. Not a large role. And thus, Olivia passed on her option to return. She enjoyed playing the role and was one of the bright spots of Apocalypse, but when there is no room for development it begs the question of why even return.