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I've spent some considerbale time trying to solve this myself, but here I am.
I have repeatedly tried to use the Fresco smudge tool with zero results. I have messed around with countless settings and brushes and scoured the internet for something similar.
All other parts of Fresco seem to be working just fine.
Using a Surface 6
Sorry you're having so much trouble with the app.
The first thing I'd like you to check is that you have the most current graphics driver for your device. You can check that here: https://helpx.adobe.com/fresco/system-requirements/2021.html#graphics-driver.
Let me know what you find.