Press the Green Flag to start the mosaic effect which only effects the cat and pressing the stop button (red octagon) will keep it at the same level of mosaic (Pressing the Green Flag again will reset the effect). Drag the Crab and Cat around to see when Scratch considers them touching when the mosaic level is changing. You have to let go of the crab for the touching state to update (only for changing the state to true).
FOR SDS, NIFTY EFFECTS