Why or how is it that when phantom limbs come in contact with other objects or people and actually generate that sense of contact, I'm confused
The answer to this depends on what you think phantom/astral limbs are.
Scientific explanation: Phantom limbs occur when someone’s internal body map does not match their physical body. They are, essentially, your brain going “this body part should exist so I’m going to pretend it does”. Because of that, when the space your brain is convinced contains that limb touches something it can result in tactile feedback. This phenomenon has been documented using MRI in both amputees and people with supernumerary phantom limbs.
Spiritual explanation: A person’s body map is determined by the shape of their astral body, so phantom limbs occur when a person’s astral body does not match their physical one. Phantom limbs, then, are body parts that exist on the astral plane but not the physical one. Because of this, they can pass through physical objects but will often give sensory feedback because they are a real part of you.