I get caught out with something like this from time to time. For me, it’s always that I have forgotten to release the mouse button after highlighting and then re-pressing for the drag.
Apart from that, no problems here … all versions of OS-X/MacOS up to Monterey, all processor types, Motorola/Intel/M1.
I can highlight! That’s it however. It works with other software so I suspected it might be a settings issue, maybe I just inputted a shortcut by accident.
Maybe resetting SMC and/or NVRAM will also help the situation. I seem to have to do that a few times a year. I don’t know if either has an effect on mouse actions, but my hunch is that they might and it can’t hurt.