Yup, you're right - however this is a major hassle to fix. Not just because it'll apply to everything, that could disappear while the mouse is hovering it (including players), but because it'll also fix itself if you move your mouse even by one pixel.
The entire thing is a bug in Flash from my point of view: If you look closely, it doesn't even refresh the mouse cursor if the item disappears - which I have no control of. I could manually work around by catching all instances where an object could move away while it's hovered, checking the cursor position and hiding the tooltip when appropriate, but .. it just doesn't seem worth the extra load this would put on the client - to merely patch buggy Flash behaviour.
