I can cycle through all the modes of interactive routing, but Altium doesn't seem to care. Any trace I lay will just step right over other nets that already exist, with no effort to push or avoid. A DRC error is instantly generated because of the short circuit this creates. Why is my interactive routing not working properly?
As the OP is asking, I'm posting the comment as an answer, since this was the real problem.
The behavior the OP was experiencing was due to the fact that the clearance rule was violated even at the starting point. It appears that if the routing violates rules at the starting point the smart placing feature does not work, and as soon as the line is completed the online checker complains.
The user can notice this because the line he starts drawing can go even on nearby pins.
The way to solve this is simple: avoid violating rules at the very first point of the routing
I was trying to solve the same problem. so I noticed what was wrong in my settings: In "design>design rules>clearances", from the dropdown menu of "where the first object matches" must be selected as "All".