When you click on a collapsed top-level folder in Favorites to drag it up or down, there's an inconsistency to what Logos displays while you're dragging. If the folder has favorites links in it, Logos will display a light version of the contents of that folder while you're dragging. It's annoying because it gets in the way of being able to see the horizontal line showing where your folder will be dropped when you let go of the mouse. If the folder has only subfolders within it, Logos does not display a light version of the contents.
Here's a video that demonstrates:
[view:http://content.screencast.com/users/rosiep/folders/Default/media/f286585a-65a9-41d9-be00-d5c56a978d30/dragging favorites folders_controller.swf:640:498]
EDIT: A clarification: As long as there are any non-folder items within a folder (regardless of whether there are also sub-folders), the annoying popup shadow will appear while dragging, but if there are only sub-folders, then it won't appear. What I'm advocating for is that the latter behavior is nicer and should prevail all the time. I think the former behavior is relatively new, as I don't recall ever seeing it before today, and I've done lots of dragging of Favorites folders around in the past, however not too recently, so it might have been introduced several betas ago.