Parts cannot be moved via "Drag Component" with "Physical motion" enabled.
If this behaviour occurs once, then you cannot subsequently move any parts in other
assemblies too. You have to close and restart Solid Edge.
One scenario where this can occur is when there is an assembly cutout which
completely cuts away a part or parts. In this case you need to delete the
part/s from the assembly - as it is not required anyway.
Notes and References
OS Version: 864