On the start of the layout, you need to pick the various fire sprites and the bg1 object they are to be pinned to by using pick by UID. The way you have it, all fire sprites are pinned to the first instance of bg1, even the ones that appear over bg2 (because no bg1 is selected, I think c2 has chosen the one with the lowest IID for you).
Just for reference, you're better off posting questions like this in the How Do I forum in future. By the way - welcome to the forum!