Yes. iTunes on my Mac has exactly the same problem, and at least one of my friends confirmed that they have observed the problem, too. I'm guessing that 99% of iTunes users have simply never try to drag-and-drop playlists. Otherwise, there would be a riot about this. Moving a *different* playlist than the one that was dragged is quite literally the most egregious UI bug that I have ever seen in professionally-written software. And it's also one of the most frustrating because I know of no other way to move playlists to a different folder.
But let's be clear about one thing: dragging playlists out to the top level is a different issue that has been an annoyance for years. Yes, it can be done, but you have to find a spot where the little blue line appears, and the area where that line appear is usually so small that, unless you have the steadiness of an open-heart surgeon in your mouse-hand, the line will probably have disappeared by the time you release the mouse button.