disable the hover state

As you discovered, the hover state takes precedence over the selected state.

The reason they move is a bit more esoteric. States have a size and a location. If you edit an object's states, and click format, you can see both of those in the ribbon. When you select an avatar, they need a much wider space because their arms are out to the side.

It has to do with the way the avatar fits in its bounding space. The part of the body that is farthest to the left is always the same distance from the boundary, or origin. Putting their arms up makes them wider, which means that their body has to shift right, or their origin has to shift left. In an attempt to keep the body more or less in the same spot, SL moves the location of the origin to the left (the X in location becomes negative, sometimes by as much as 30 pixels.) Each state's bounding box has a small cross so you can see its origin.

When you select, the bounding box moves left. When you hover, the bounding box remains where it is, but the form inside it changes to hover. The body is still positioned in the same spot in relation to the origin point. That's so when you hover off, the selected state won't move. I'm pretty sure it is a design derision, not a bug. After all, they had to decide what to do with states of different sizes. In the case of avatars, if they keep the arms in the same place, the body has to move, and if they keep the body in the same place the arms have to move.

I think your only solution is the create states that are exactly the same size and location.