[After messing with this I found the solution - but I think there should be some way to let the user know - The solution is to take the folder you want to copy, and drag it off to the right side of the plugin folders, nowhere near any other folders, and jump the line quickly to places inbetween the folders - you can sometimes accomplish this but not always. That helps avoid the issue a bit - its just that I’ve never had a program with this workflow so I didn’t see it coming. 
]
The problem I had:
The problem is this: Say one has folders one is organizing under the category of Effect Plugins by Company.
Say that one wishes to alphabetize the folders.
Say one has a long list of these subfolders of plugin companies.
Say one has many plugins already in the folders.
Say three of those companies are XILS, Xfer Production and WA Production.
One has to drag a folder from the top of this list (lets say a folder called XILS), past all the other folders, and place it between the WA Production & Xfer Records folders. Dragging this folder and attempting to place it between those 2 folders so happens to result in opening them, making the list extend down off the page. When the folder above your target is open you can’t place your folder - it will go inside that opened folder. While it is possible to get the blue line to appear by carefully placing the cursor, when one lets go one has to be extremely careful to keep the cursor still, depending on the resolution of the computer, or one either drops the folder in a subfolder, or opens the folder and makes the target folder end up way down off the screen (which again one can manage to massage into auto-scrolling to reveal the target again, but it isn’t very simple). Could it not be possible for Cubase to detect when one is past the folder column, to the left of it, in the arrow column? (Thereby preventing folders from being opened unintentionally. And would it be possible for that blue line to be thicker, thereby letting people with less steady hands manage to drop off the plugin folder where one intends it to go, without misplacing it and without opening long lists of plugins in the non-target nearby folders?
I think I understand how this is supposed to work, and I’ve still found myself repeatedly placing folders 1 level below my intended position, thus opening a folder up that makes the process tedious. My cursor is over to the left, in the column with the folder arrows. When my cursor is there, IMHO, the folders should not be opening, but they do open.
A temporary workaround would be to let the user who wants to sort the top level folders lock the folders from opening. (How often does one really intend to drag something from one level to another - its not like we’re creating a complex tree structure here 
Something else I just noticed, if I’m in the middle of the list this isn’t so much of an issue, because despite many folders opening against my wishes, I still have room above or below where I’m actually working. I can place my folder somewhere almost where I want, and then hope to move it again to get closer. But at the top or the bottom there aren’t as many nearby options. So what I was thinking was that I could drag the folder until I saw the ghostbusters no-no symbol. I assumed if I let go there, then it was equivalent to cancelling the operation. But instead it apparently deleted my data. CTRL Z doesn’t undo it.