Is Overlapping Component works only when the character moves?

I was following a tutorial to make the character mesh disappear when too close to the camera. To make it work, the tutorial guy attached the sphere to the camera, so that when the camera hits an object and gets closer to the player, at closer distances the sphere would overlap with the capsule component and make the mesh disappear.
I’m sure there are other ways to do it and the tutorial was a bit old, but I’m still learning and I don’t know how to do this otherwise.
I asked in a facebook group and another guy noticed the same behaviour, so I guess this is just the wrong solution after all.

And yes, it always remains attached to the capsule.