Expected behavior:
Within the WYSIWYG editor, we have been able to select and drag an image (that is already inserted in the page) to move it to a different position on the page.
Current behavior:
For a few days recently (possibly longer and I didn't notice), when you drag an image then release the mouse, the image disappears and what remains is a (text) URL link to the attachment. This is obviously the wrong result.
By contrast, if you select the image plus some adjacent text, then drag that selection, it moves to the new location. The image is preserved. (So that is a workaround of sorts.)
So it is a bug only in dragging the image by itself.