I can reproduce on desktop (Mac), tho I found it a little difficult. I haven’t noticed this behavior previously because when I drag all the way to the bottom it tries to move the heading to first level, which doesn’t work so it does nothing. So I usually work around by dragging the heading the the next to last position and then dragging the last one up.
When dragging a heading, the width of the purple line changes to indicate where in the outline it will go. I started writing up some specifics of the dragging behavior, but found it more complicated than I expected. Possibly things behaving as intended, or there maybe more bugs or a more general bug.
On mobile (iOS) I’m not able to reproduce the behavior because at the bottom the purple line jumps from third level to first level. I can’t get it to offer second level. Dropping the heading at first level does nothing (the heading stays where it was).
For anyone who wants to test, here is a code block for convenient copying.
# Top
## Circle Fanclub
Circle Fanclub text.
### Circle Chart
Circle Chart text.
## Triangle Fanclub
Triangle Fanclub text.
### Triangle Chart
Triangle Chart text.