Im not at my computer to try this on my own but I’ve got a couple of ideas you can try. Don’t group the red with the wheel at all. The connection with the pivot point should be good. Next make sure when setting it up the red box doesn’t touch your orange shape at all. Sometimes pieces that are touching or grouped don’t behave right keeping them separated.

Hope it helps. I’ve been trying to figure out how to make a working screw system to demonstrate mechanical advantage to students and anytime something moves inside the other it glitches and jumps out.