@Sauermann helped me with a similar issue (and made me aware of this post) so I just thought I’d share what they helped me come up with in the hopes it’s useful.
This worked - with what you were saying before about setting the ordering to true, thanks!!! - I should’ve been more thorough with my testing.
For the benefit of anyone else who was struggling with this here is the code that worked thanks to @Sauermann . (I’d upload a video showing the result but new users can’t upload files - if I remember I’ll come back and add later)
Working example
Both the stage and item objects are StaticBody2D with a Sprite2D and CollisionBody2D - the _on_input_eve…