Hi @Sam26565654u0mq,
Thanks for sharing the recording and explaining the issue in detail. I tested this on my end, and the duplicate-drag function worked correctly with Smart Guides both on and off. Could you please confirm which version of Illustrator you're using and share your operating system details? It would also help to know if this happens in all files or only specific ones. In the meantime, please try resetting Illustrator preferences manually using the steps here: https://adobe.ly/4nxx7Jg, and check if toggling GPU Performance in Preferences makes any difference.
Looking forward to your update.
Abhishek