Understandable frustration. The site is very... quirky, and long-time users tend not to notice the shortcomings because we are used to seeing them and working around them. According to the wiki ("Batch Image Relocation"), to move selected items into a folder, you must drag the items to an uncollapsed folder in the My Library panel, not the folder in Folder View (which is admittedly the behavior you would expect). I think that's what your screen cap was demonstrating, but I wasn't sure.