Im running 20.04 and was able to reproduce the behaviour.
My steps were-
Have window placement ‘select windows when mouse moves over them’ and ‘unselect windows when mouse leaves them’ checked.
I left ‘raise selected windows after an interval’ unchecked.
Make firefox maximised
Have control center on top of firefox.
I can move mouse over each of the windows and they are selected but firefox remains behind.
Now make Firefox fullscreen by f11.
Alt-tab to get control centre back on top.
Moving mouse between windows brings firefox to forefront.
As a workaround in the meantime might I suggest that you do not fullscreen the app, but instead try the feature under mate tweak - windows - undecorate maximised windows?
This will save a little space but they wont be fullscreen.