How do I make the most out of 'touch' functions?

Hi there, I've been developing a point-and-click adventure game for mobile, and have to use the 'touch' object type.

What I want to make is an object, when it's held over, there'll be an 'interact' button popping up. And when you let go, if it's over the 'interact' button, something will happen. Else, the button will disappear. I've tried this method, but the button won't disappear.

So, why?

Maybe something like this could do the job:

Thanks! It works like a charm!