minecraft:interact_button will not register inside an entity's interact range

Summary:
Custom items cannot be "used" at close range, looking at a mob

Verification Build:
1.20.80

Regression Builds:
N/A

Impact:
We are working on content that requires using custom items at close range, currently makes the content not working which will severely affect our upcoming release cadence

Repro Steps:
1. Download Craftee Companion Add-On
2. Turn on cheats
3. Get an instruction book - `/give @s ldz_crcomp:instruction_book`
4. Walk up to an entity
5. Attempt to open book by tapping the use button on your mouse (or open button on mobile)
6. See results

Observed Results:
The book will not open.

Expected Results:
The book should open. That button should work regardless of any factors.

Notes
No custom items will trigger via the interact button when at close range in an entity's "interact" or "damage" range. This is highly obstructive behavior as this disallows for any meaningful melee combat elements, since melee combat requires close range.

Video example (too large to upload)
https://www.youtube.com/watch?v=tzv0-ohOZNU