When moving objects tied to controls, the spatial transformations controls, the object will not change its transformation because its locked to the controller transformation matrix.
As a suggestion, we change the color of the surrounding boxes ( both the hover and the selection ) to something that will indicate to users that they can't move the object really, but they can select it. Color red might be a good choice for the selection, and green for hover, just a suggestion.
This behaviour can be seen in the Character.jme file.
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