Official Guide
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Object
The object layer is placed below the avatar, so if the impassible tile effect is not used, avatars will be able to walk over it.
Top Object
The object layer is placed above the avatar and other objects. This allows top objects to be placed on top of objects (such as a computer on a table) and if the impassible tile effect is not used, avatars will walk under it.
Other than the layer level, top objects and objects are exactly the same.
If you’re having trouble editing an object’s settings, check to see if it is a top object.