no, you misunderstand! The first search just finds what parts of the world the mouse lies in (it can lie in an arbitrary number, but practically in 2D the most is 4). Then, for every single part of the world the mouse is in, search the pertinent entities to see if the mouse bounding box overlaps the entity bounding box. You must search every one because typically your mouse can overlap more than one unit (if it is enclosed in a box), in that case you want the closest.