Here I have attached a sample project with the scenario that you describe. It demonstrates that the line used to indicate the drop zone between nodes works just fine. However, if you need to drag and drop only a single control that is situated in a child node (or a node) and not the whole child node, then this is an option that we do not support. We only support DragAndDrop between nodes (or child nodes) and not just a single control that they may hold in the NodeTemplate.
the Telerik team