Ok can you provide screen shots of your hurtbox’s layers and masks, and the same for the item you’re trying to pick up?
I would suggest using another Area2D/CollisionShape2D for picking items instead of using the same for both as a hurtbox and for item picking. Your code gets more clear and the item picking radius (I’m assuming a circle shape) can be set separately. For example, if some buff increases the item picking radius, you can easily do that without affecting the hurtbox radius.
The hurtbox’s layers and masks are simply both 1. The same goes from the item.
And you connected the signal?