We report a comprehensive density functional theory based first principles studies on newly discovered iron-based RbLn2Fe4As4O2 (Ln = Sm, Tb, Dy, Ho) superconducting compounds. A dominant Fe-d state, along with small arsenic state contribution is found in the low energy regime of all the four compounds, that constitutes conducting Fe-As layer. Orbital selective evolution of electronic structure is evident in hybrid RbLn2Fe4As4O2 compounds under the effect of chemical pressures induced by various lanthanide substitutions, and moderate on-site electron correlation. The characteristic electronic structure with multi-orbital derived multi-band nature undergoes an orbital-selective evolution. In all the four compounds, an orbital selective Lifshitz transition as well as an orbital-selective bandwidth renormalization is predicted due to on-site electron correlation. The calculated Fermi surfaces show evidence of bilayer splitting due to the interlayer inter-orbital interaction between the two Fe-As layers in a bilayer block. The splitting is found to be minimum along the Brillouin zone centre to the corner and is maximum along the zone centre to (π,0) direction. The largest significant effect due to spin-orbit coupling is the splitting of dxz and dyz derived bands above the Fermi level. The size of spin-orbit coupling is found to be consistent with earlier theoretical calculations on 122 materials. Splitting increases with substitutions of lanthanides in decreasing order of radii. Spin-orbit coupling influences the size of the Fermi radii and thus likely to influence nesting conditions and superconductivity as well. Predictions on possible pairing symmetry based on orbital characters of the Fermi surfaces together with qualitative estimation of nesting conditions for Fermi pockets are provided. The calculated large Fe-As hopping amplitudes based on 32-band Wannier function tight-binding Hamiltonian indicates that electrons mainly hop through As atoms.