Drat! I thought that would work.
I think the issue is that the trigger for the custom hover state includes "Restore previous state when the user hovers out." Unfortunately, the "previous state" (that is, the state the object was in when the user started hovering) is Normal. So it goes back to that.
Well, if you really want a different look on mouse-over, I suggest you use the built-in Hover state. Yes, it will still show even after the user has selected the object. However, that indicates that the object is still clickable.
Or just don't include any hover state. After all, it's not accessible; users can't "hover" on a phone or tablet.