Why doesn't clicking on an object select it? Even when it's outlined in blue

I hate using auto select because it never selects the correct object, so that's not an option for me.

By @neonmamacita

It’s funny that you said it that way, because you actually described the problem that the blue rectangles are designed to solve. But you defeated the solution by disabling Auto Select.

The problem was exactly as you said: People got frustrated because they weren’t ever quite sure which layer was going to be selected if they clicked the Move tool with Auto Select on. So, Adobe added the Show Layer Bounds on Hover option. If you enable that option, now it’s safer to leave Auto Select on, because as you hover over overlapping layers, the blue rectangle tells you what’s going to be selected if you click there. No more ambiguity or doubt…you’ll select what the blue rectangle encloses. If you don’t want to select that, don’t click, reposition the mouse until the blue rectangle looks correct.

That’s what’s shown in the demo below:

1. No blue rectangles means Auto-Select is difficult to use with overlapping objects.

2. Enabling the Show Layer Bounds on Hover option means you can now see in advance what Auto-Select will select if you click there. 

3. If a layer is selected in the Layers panel, its blue rectangle is persistent, but another blue rectangle appears over other layers you hover, so that you can understand which layer you’ll select next.

If you disable Auto Select but leave Show Layer Bounds on Hover selected, then a blue rectangle surrounds only the layer selected in the Layers panel and the layer you’re hovering over in the Layers panel. Which is still helpful, but not on the canvas.

So, in practical terms, most people should choose between one of these two combinations:

Enable Show Layer Bounds on Hover, and enable Auto-Select, then use them together.

or

Disable Auto-Select, then disable Show Layer Bounds on Hover if the blue rectangles are distracting.

@neonmamacita The blue outline you are referencing is the new "hover" feature - you can turn it off using the gear icon in the options bar while using the Move tool. Your Auto Select options are also in the options bar using the Move tool- make sure its checked on.