'On drop' Adds only that 1 dropped Sprite to the 'PickList'.
All following conditions start picking from that 'PickList'.
Hence, 'Is overlapping' can not find any other Sprite besides the dropped one, only the dropped Sprite is 'Picked'.
Use a Family. The preferred method.
No money for Familys ? Use a helper object.
Or, use logic. Each sub level has its own 'picklist'.