(So let the Children of Israel go with us, and torment them not; indeed, we have come with a sign from your Lord! And peace will be upon him who follows the guidance!") (20:47)
وَلَقَدِ اخْتَرْنَاهُمْ عَلَىٰ عِلْمٍ عَلَى الْعَالَمِينَ And We chose them, with knowledge above all the worlds. (44:32)," This does not imply that the Children of Israel are superior to the Ummah of Muhammad ﷺ ، because the verse means that the Children of Israel were given superiority over all the people of their time. This is just like the Qur'an has described the merit of Sayyidah Maryam (علیہا السلام) as being superior to the نِسَاءِ الْعَالَمِينَ "women of the worlds (3:42) which means that she was superior to the women of her time." It is also possible that the Children of Israel have some sort of superiority to all the people of all times and ages from a particular angle, but collectively the Ummah of the Final Messenger ﷺ holds the highest status. (See Ibn Kathir and other sources for details.)
عَلَى الْعَالَمِينَ "with knowledge" means that every work of Allah has wisdom. Thus wisdom underlying Allah's knowledge dictated that they be granted superiority, and they were granted accordingly.
Tazkirul Quran
Maulana Wahiduddin KhanOn ayahs 29–32
After prolonged effort on the part of Moses to bring Pharaoh’s people to the right path, by preaching the word of God, his assignment to issue the call for the Truth came to an end. At that time, Moses was instructed to leave Egypt and move out along with his people (the Children of Israel). Accordingly, Moses set out and journeyed until he reached the banks of the Red Sea. The waters parted for him and a path appeared for him to cross over. Pharaoh and his army were in hot pursuit of Moses and the Children of Israel. When Pharaoh saw a path being formed across the Sea, he thought that he could also cross it, just as Moses had done. But the path across the Sea was not simply a path in the ordinary sense. The waters had parted by the commandment of God and God’s commandment was for the deliverance of Moses and the destruction of Pharaoh. So, when Pharaoh and his army entered the Sea, the waters rushed upon them from either side of the path and rose to their former level. Pharaoh was drowned along with his army. One who receives the good things of life in this world often considers them as his personal possessions, though in reality, they do not rightly belong to him. God may give them to anybody whenever He wishes, then, taking them away from him, may give them to somebody else, just as He pleases.
Uthmani text of the Madinah mushaf (King Fahd Complex). Translation: Saheeh International. Tafsir via Quran.com.