Yep. You explained it perfectly. I believe that was me here.
In looking at the DZ, the square that may have been Overlapped by the rectangle around the object may have been this one:
Note: I drew the rectangle to illustrate the principle. It is only a SWAG that the rectangle is that size and location. It could be smaller or larger and will relocate, frame by frame, as the object relocates frame by frame. The Wyze AI Engine does not mark videos with the “Detection Rectangle”. The Cam will mark a Motion Tracking Rectangle (green), but this is only used to show motion. As we already know, the AI Engine ignores motion and sees all objects as stationary.