I had this problem as well. Here’s what happened and how I solved it.
When I created a folder and tried to move existing documents into it, it would not work. The documents could be dragged above or below the folder but never “into” it. I noticed that the folder itself could be dragged, but could not really be “opened” to reveal it being empty.
To solve this, I right-clicked the folder and created a new document within that folder. Once there was an item in the folder, then other documents could be moved into it.