When you drag a folder and move over a folder, the hoved-over folder is highlighted with orange box, that means you'll move dragged folder INTO it. In the following picture, folder "2023" will be moved INTO "2024".
If you hover over the gap between 2 folders, you'll see a line, which means you'll move dragged folder BETWEEN those 2 folders. . In the following picture, folder "2023" will be moved between "2008" and "2024".