There aren't any transfer objects in your system. You have moved two seperate segments of conveyors together building a crossing visually. The engine has not created any transfers automatically at the borders of the segments. Please draw a segment end to a side of existing conveyor and you will see that the side skirts creates a gap and a additional object occurs that looks like a square wireframe. This wireframed object is a transfer.
An item can only be send through a side transfer if it's leading edge has not yet reached the transfer point. In your model you'd need two stations, one for each incoming conveyor ahead of the intersection.
It is still a discrete event simulation. On a conveyor system entering, processing, leaving must occure each step one after another. You can adjust with small gaps this situation yourself. Alternatively you add a fixed resource object in the middle of the crossing.
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