This is using the Folder View as the desktop containment and showing the default Desktop folder. It appears not to be possible to drag icons (file, folder, shortcut or anything else) around on the desktop unless both "Locked" in the "Icons" submenu is turned off (check box clear), and the desktop widgets are unlocked. If either of these are locked, then an icon can be dragged but springs back to its starting position when released. This is not a serious problem, but having two options both of which need to be changed could be confusing to new users. Either only the "Locked" checkbox should affect icons and the "Lock Widgets" setting controls desktop widgets, or possibly the icon option could be eliminated and the widgets lock used to control both. Reproducible: Always
*** This bug has been marked as a duplicate of bug 360578 ***