After updating to the latest version of Photoshop (23.5.1) I have several instances where I place an image onto another image (using place or simply dragging a layer from one image to another) and then try to use the transform tool to transform the new layer. The handles appear but I am not able to drag them. I can't get any layers in the image to transform when this happens. If I close Photoshop and re-open and try the same thing again it will work fine... for a time. Then it will happen again at some point.
Since when have you noticed this issue? Are there any other tools that are misbehaving? Is the layer locked? Try to reset the tools followed by Photoshop preferences. Steps to reset the Tools and Preferences: To reset all the tools at once, right-click on the icon of whatever tool is currently selected in the Tool Options, select "Reset All Tools," and then click "OK." Using the Reset, All Tools option will reset all the tool selections in the Tools bar to their defaults. You may try to reset Photoshop preferences back to defaults and check if that helps. Here's the article for the steps: https://adobe.ly/3ceal5t
Also, back up the existing Photoshop preferences if you have any custom brushes, action, and workspace: https://adobe.ly/2vNz6FG.