I unchecked "Allow drag and drop into sub-folders ( without a qualifier key held down )" and am satisfied with the behavior, however when you drag a tab it will still "create a link" ( Which should only? happen when you drag the icon from the breadcrumb-bar )....
I did enable dual use for the tabs so icon shows simple menu, title shows the explorer menu with some additions...
If I drag from icon, behavior is reversed from expected; ie icon should let you create link ( I have icon displayed in breadcrumb bar too ).
If I drag from folder-name, you have duplicate-tab using thin-I-Beam-line between others with minor distance before "Create Link in %1" appears...
Note: I moved tab-list to the left as suggested and I noticed the language isn't correct when tab-bar is vertical... Still says "Duplicate tab on right"... And "Move tab to right" instead of "Duplicate tab below" and "move tab down".. This is minor issue..
Turning the option off makes it so child folders ("sub-folders") are not drag & drop targets, to help people who accidentally click on folders in the main file display and them drag them a small distance and end up dropping them on a folder next to them in the list, causing it to be moved unexpectedly.
But you can still drop things on to the folder itself (the folder you are in, not any children of the folder), as well as on folder tabs. The option has nothing to do with either of those things.
I'm saying I like that option, but the TAB LIST is the problem... The tab list will create shortcuts all over instead of using that option to not allow links, copies, or moving....
Re that part, the labels are correct and I think you're confused about what the commands do.
They refer to the dual file display positions, not the tab bar.
If you have dual file displays in a horizontal arrangement then the labels will change to say above/below. In the vertical arrangement they say left/right. The commands are for duplicating the tab into the left or right (or top or bottom) dual file display. They aren't about where the tab appears in the tab bar relative to the selected tab.