I think you read those conditions the wrong way.
Maybe you understand this example better:
https://
drive.google.com/open?id=0B1SSuCVV8v74YlBUdzI3dzhlQ28
The thing is. This is not a logic puzzle like the easy if x=4 or if x=5 then do this.
This is are pick conditions. Its not comparing overlaps. It is making Selected Object Lists. And that is all it does.
The overlap logic is only in your mind, its is not part of the logic.
The question with pick condition is always simple: what is in previous Selected Object List. And what did we filter out (or not) in the next pick condition.
Okay so:
Sprite is overlapping tiledbackground ...
1/ if the sprite is overlapping, both sprite and tiledbackground are in the SOL. This made the previous picked SOL for the next pickevent. If now the mouse is not over the background, that background dissapears in the SOL. Simple as that.
2/ if the sprite is not overlapping the tiledbackground, the SOL is empty, it does not matter what the mouse does, the tiledbackground is just not in the SOL to begin with. Simple as that.
3/ if the sprite is overlapping, both sprite and tiledbackground are in the SOL. If now the mouse is over the background, that tiledbackground stays in the SOL. And finaly the tiledbackground that is in the SOL gets set invisible. And that is why you see this as an AND event. While it is not.
There is a BIG difference in logic between pick-events and non-pick-events.
The only thing that pick-events do is filter previous picked Selected Object Lists. And the previous picked Selected Object List is empty when a new root event is started.
And that is in 2 sentences all you need to know to make good pick events.