Hey ,
Okay, I see some slight movement in Y for PhysicsActor, despite Locked Axis of Y being set in Sprite. I have entered a bug report for developers to look over (TTP# 347496) and I will let you know when I see any update on it.
In meantime, I was able to see that Y doesn’t seem to change any more than 0.1 in either direction. That’s not supposed to happen, but it does mean that you can work around it for now by moving trees or other background sprites a little further back. I would recommend a minimum of -1 if at all possible. Using very small values ( trees in test project you uploaded, for example, were set at -0.01) will run into some known floating point precision issues.
Hope that helps! Thanks for report!