Fair warning that what follows is quite a bit of a diversion; but, I believe it is nonetheless relevant.
To adapt this hierarchical rearranging technique to fit within Obsidian’s methodology of being capable of but not limited by hierarchy, maybe this feature would be more akin to linking a list item to another, thus dropping an instance. What I am imagining would definitely fit into the way I build out ideas. I had originally tried using Obsidian in this way via actual notes and links by treating the note title like the note itself and arranging hierarchies of links with the benefit of being able to adjust the note’s title and update all links to it. However, this strategy is a recipe for tripping over yourself and feeling lost within an overly complex vault. And that is where this solution shines, since it is contained to just one note.
It would be like a mini vault drafted then defined within the list hierarchies of a note. Each time you link a line to another line, it puts an instance of that line folded directly beneath the chosen one. This instancing moment parallels when you actually create a note from a link in Obsidian.
So technically, after this line linking occurred, you would be free to delete the source line or even the instance because it would be stored as an element of the note. Perhaps a list at the top of the note would contain these elements and act as a note explorer of sorts. And auto suggestions could work for adding it elsewhere within this and other lists while in the note. Of course this is in addition to the drag rearranging feature that this feature request topic is all about in the first place.
And now that we have dragging and dropping of note’s links from file explorer into notes, I don’t see why not to have this ability to lists from within my proposed note explorer, which essentially could just be an adjacent split pane version of the note itself set to filter out all except that definition list.
This definition list could allow list hierarchy adjustment in its own right; however, in this case you would only be moving it around for better organizational structure. Maybe it could have a flat mode toggle with sorting to quickly find what you are looking for. Although I know I have already gone too far, I would be remiss if I didn’t hint of a possibility these element instances may have taggability and back link capacity all restricted to the confines of the note. And this would logically provide an opportunity for an in-note search.
Ok, I’m done. Phew! I know I have ventured far from the original thought and deep into separate feature request/plugin territory, but I am positive that the original poster does not mind, so I will leave this here for now.
Anyways, thanks for the positive responses to the original idea, now back to discussion about that, since, depending on any response, I may start a new request.
Thank you to the developers, plugin creators, and theme makers for collectively creating a tool that itself is crystallizing into the obsidian of knowledge tools.