This behaviour is expected because when an item is dragged to the new container, the container expects to be reordered with moving the dragged item. That is why it expect the new item to indicate movement up or down. The first item is working differently because when there is currently no items it does not matter if it will be dropped up or down.
I can understand the desired result to just drag to new items in the area and by dropping them to either go on top or on the bottom, but this is currently not supported and there is no workaround available.
I can suggest submitting a feature request in our UserVoice portal and based on its popularity we may implement it in a future release:
Telerik by Progress
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