Question

How does the ability pick up work if the dowsing machine doesnt register anything in the area?

Answer 1

Pick-up has nothing to do with hidden items. Heres hows pick-up works

Comments

Beat me to it. I'll upvote you.

Answer 2

The ability pick up doesn't pick up items around you, it really just gives you a free item after every battle. The item differs on the pokemon's level, so the higher the level, the rarer the item picked up.