Detect collisions for an object circling another object

Hello! I'm trying to figure out how to have collision for an object that is circling another object. The problem I'm having is that since I have the second object set to the first object at an offset every tick the second object phases through obstacles.

I've attached what I've figured out so far, hope some of ya'll have an idea on what I can do :)

drive.google.com/file/d/1PylZcRZVMRau5VVBNNTtfyfjdKuVfS60/view

It's not recommended to move Physics objects with non-physics actions or behaviors. (In your case "Set position")

I would probably attach two objects together with a revolute joint and rotate the bigger object by applying force.