We’ve found that with touch screen enabled on a device, the user is unable to grab and drag the label on the new Labeling Activity with the cursor. However, the user is able to use the touch screen to move the label.
Please use the touch screen to drag both the label and label target.
If you are not sure whether you have a touchscreen enabled device:
Open File Explorer
Right-click on 'This PC'
Look at Pen&Touch