Why not SNAP to closest point?

I have been wondering this for A LONG TIME. When selecting a point to modify, be it shape or line, etc. why doesn't microstation select the closest point to snap to. The images are trying to show what I mean. In image 1 I have selected a point on the blue shape, I want to move the point to the end of the yellow line. As you can see the First point it tries to find is the red dotted line (a reference file) and when I snap it goes to the red dotted line (image 2) THEN the Second Snap will go to the yellow line.

Why doesn't microstation select the closest point? Turning off Locate on the reference works but it doesn't answer the question. This happens even when I am working on files without references.

Is there maybe a setting to fix this?

Thank you