It results in dropping to a directory that is displayed in location bar of target lister (unless dropped precisely on expanded directory item); parent or higher in hierarchy.
I think that it is counter-intuitive. I would expect that a target should be the expanded directory.
Directory Opus 13.11 Build 9081 x64
OS 6.1 (B:7601 P:2 T:1) SP 1.0 "Service Pack 1"
If then I will try to DnD Example1.txt from right side to area between Example2.rtf and Example2.txt in Subdir2 it will result in moving Example1.txt to C:\Test.
To move Example1.txt to C:\Test\Subdir2 I need DnD it precisely on Subdir2 item
Setting aside the expandable folders in the moment:
If I want to DnD something to some directory I do not need to drop the something precisely to location bar where the name of the directory is displayed. It is sufficient to drop it in area where the files located in the directory are displayed.
I would expect the same for expanded directories. If I drop something in area where files located in expanded SubDir2 are displayed then the target should be SuDir2 but not its parent nor any other directory whose path is displayed in location bar.
Expanded directories don’t change which directory you are currently in. That’s the directory files are put in when you drop them on the folder background.
(And think about the case of an empty expanded directory.)
Then (for the directory) there would not be the area where files are displayed and where something would be dropped. But it does not mean that possibility of DnD on such area resulting in expanded directory being target would spoil anything.
Think about an expanded directory containing hundreds of files and when middle of it is currently displayed in lister.