Also experiencing this issue since Big Sur, really annoying. This method was the most convenient for me since it is executable with one hand (in contrast to the methods that use some key combinations) and extremely fast (in contrast to just drag it to the edge of the screen and wait).
It is definitely a bug, since it works very few times. I do not think the problem is that it cannot track 5 fingers though, because I can still activate the Launchpad while dragging.
Also, the workaround with checking "enable dragging" does still not allow me to switch between spaces when dragging.
Seriously hope they will fix this soon.