A computer system, while displaying a view of a computer-generated environment, detects movement of a physical object, and in response: in accordance with a determination that a user is within a threshold distance of a first portion of the physical object and that the physical object meets preset criteria, the computer system changes an appearance of virtual content displayed at a position corresponding to a current location of the physical object's first portion, without changing an appearance of virtual content displayed at a position corresponding to the physical object's second portion; and in accordance with a determination that the user is within the threshold distance and that the physical object does not meet the preset criteria, the computer system changes an appearance of virtual content displayed at a position corresponding to a current location of the physical object's first portion.