Create a class with properties and set the RadPropertyGrid.Item to an instance of that class.
Select one of the properties in the grid.
Set the Item to null. (Clear selection if your Item is binded to some listbox selection, for example).
The property grid should be empty now. Click in the empty space.
Notice that you can see the previous selected property name in the Description Pane.
More importantly to us for CanExecute calls, RadPropertyGrid.SelectedPropertyDefinition is not null. (even though Item==null).
This is a reference leak also since you are holding onto references after Item is set to null. :(
(Looking at the code, it looks like when Item property changes, you are setting SelectedPropertyDefinition to null, but you aren't clearing the SelectedPropertyDefinitions collection. As a result, the RadPropertyGrid.OnMouseLeftButtonDown calls SetSelectedPropertyDefinition(), and in there, it simply checks for any items in SelectedPropertyDefinitions and calls LastOrDefault(). )