It should really only do A, but I noticed that sometimes it does B, if you're near an interactable object, but I think only if it's a quest objective. I have no idea if it's a bug or a feature, but I'd place my bets on it being a bug.
It was recently changed so that it points to the nearest interactive item. This is in the patch notes. Might want to give them a read to see if there is anything else in there that clears up an unknown for you.