I’ll have a closer look tomorrow. At a glance - the hierarchy of the dragged widget is not correct because it’s sitting in a canvas and not doing anything. This may offset things, maybe.
Also, could you briefly describe how it’s supposed to work. Initially i thought we’d be dragging something into an inventory, but here we drag the inventory windows themselves? Right? If so, what are we dropping on, the Main Hud?
Meanwhile, while you wait, have a look here, perhaps it will inspire you:
Seems very close to the setup you need. It does not utilise drag & drop (because it’s not really required here) but comes with zOrdering.