A question was posted to the newsgroups recently that reminded me that I had also run into the same situation previously.
I was trying to drag a shortcut into a folder that I had also created and it wouldn’t drag & drop for me in my Dynamics GP 10.0. I went back to 9.0 and had no issue doing this but it just wouldn’t work in 10.0.
After playing with it a bit I saw what was happening and the way around it.
In 10.0, if you have an empty folder, you cannot drag & drop for some reason. But if you have something in the folder then you can drag items into the folder but ABOVE the last item. So you cannot drag and drop something to make it last in the folder. I guess technically this is what you get when you drop into an empty folder as any item would then be the last item and it doesn’t work. Once you get multiple items in your folder, to make the item last you would have to move the current last item up until it pushes the item you want to the bottom.
To get that first item in the folder, what you can also do is use the context menu to cut/copy and paste into the empty folder. That will work at any time and put your cut/copied item at the bottom of the list in the folder. So that it another way to get a specific item to be last in the folder
I did write this up as a Dexterity bug that was introduced with the Navigation Shell in 10.0 and it is statused to be looked at for 11.0.