This is taken from the book titled: Numbers, Sequences and Series, by Keith Hirst.
I am unable to understand the logic given in Prop. 3 in sec. 2.4 as shown below (with $t$ replaced by $q$)
Let $T$ denote the set of numbers of the form $a - bq$, where $q\in \mathbb{I}$. If $a\ge 0$, then $q = 0$ gives $a - bq = a\ge 0$. If $a \lt 0$ then $q = a$ gives $a - bq = a(1 - b) =0$.
I am unable to understand the following, given $a$ is dividend, $b$ is a positive integer serving as divisor, $q(t)$ is quotient:
(i) Why $q=0$ for the $a\ge 0$ case, which means $b\gt a$.
(ii) Why taken the value $q=a$ for the $a\lt 0$ case.
What is the significance here of taking $b=1$? I mean if $a=-2, b=1$, then only $q= a$.

Why do you replace $q$ by $t$? I am going to assume you have a good reason and follow your convention.
No one says anything about $q$ is the quotient at the first part. The goal is to be able to pick a $q$ to illustrate that $T=\{a-bq: q \in \mathbb{Z}\}$ contains a nonnegative element. $q$ is any integer that we pick to illustrate that.
We want to show that $T$ contains a nonnegative element in order to use well -ordering principle.
$q$ is chosen to be $0$ if $a \ge 0$ because that choice allows us to show that $a \in T$ and $a \ge 0$.
Let $a=5$, $b=1$, why would picking $q=0$ lead you conclude that $b > a$?
If $a<0$, picking $q=a$ would allow us to show that $a-bq=a(1-b) \ge 0$ since $a<0$ and $1-b \le 0$.
You are given $a$ and $b$. You do not get to choose $b$.
If $a=-2, b=1$. then $-2-(1)(-2)=0 \in T$