Yes, that makes sense & is because the math in the Cosine/Sine block tell Hopscotch not only to draw a circle but where to draw the circle
Consider a standard Set Position with Cosine & Sine blocks dropped in (looping the Angle from 0 to 360). This is what it means:
So the "X Center" & "Y Center" override any previous position
Of course, as others have said, inside the Draw a Trail block Move Forward 1 will create a circle of the Draw Width. The different being that the cosine/sine method can draw the outline of a circle (depending on the Draw Width) while Move Forward will draw a filled circle.
Having said all that, instead of a background if you want the circles to move, you'll need to use text objects (unicode has an outlined circle).