The 1 entity restriction means that you can have only 1 object registered in the PE.

Hence when you assign that action to two objects, you register the first object created (and hence it works) but the second object isn't registered; hence when the 2nd objects actions run, it runs into those problems.

What you have to do is deactivate one object and activate another so that only 1 object is physical at a time. When an object is NOT registered, be careful not to run any PE commands (like set-type or phent_ commands).

The distance between the objects BTW is irrelevant. As far as the game enging is concerned, there are 2 objects trying to access PE commands and hence one has to fail.