BROKEN: Drag sequence from project window to timeline

also, can you doubleclick on a sequence in the project panel to load it into the timeline rather than dragging it?  

sorry, just re-read your initial post saying you had to downgrade the project file to continue working on it.  What version of Premiere is showing the problem?  If you revert to a previous version of Premiere that's a minor update, you shouldn't have to "downgrade" the project file.  

never a good idea to skip the basic troubleshooting steps...   Is this a behavior that was working properly at one time?  Have you done any Premiere or OS updates recently?  If so, revert to the previous version that was working without issue.    

It is unrealistic to expect adobe to be able to test every possible variation in hardware, OS and other software that may be installed on every system.  Back in the early days of non-linear computer based editing, avid controlled all the hardware and software and recommended that you do not install any other software on your system.  It was a true turnkey solution down to the cables connecting the drives, monitors, etc.  And when there was an update, sometimes there were issues on some (but not all) systems.  

Tried importing into a new project too. Same result.

Let's skip the usual "Tier I" solutions (because I've tried all of those and a lot more), and accept that I've stumbled onto a bug. Let's focus more on figuring out what's behind it than trying to fix it with the same generic steps we try for every problem.

I don't see how, I experience the issue on both W10 and W11, using the same project files (multiple project files on each machine).

I cannot reproduce on W11.

Import project into a new one.

@Ann Bens Neither resetting my preferences nor source patching helped. This functionality is BROKEN, and it brings my entire workflow to a standstill.

Did you source patch the track?

Reset preferences - Premiere Help