When I click the buttons Move > Collision > All components > Stop at collision- I can see the collision detection at work. But when I press the okay button it reverts back to no collision detection.
What am I doing wrong?
Nothing. This is the way collision detection works. While you're in that move mode, you can position components. This is useful for setting up animations for example.
Choose Physics to affect all related components and their vectors of motion. This helps when trying to position a series of gears or linkages, for example
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