Applet blocked by Application Modal dialog allows to drag.

Build- b26 PIT.
Steps to reproduce:

a) Load applet http://sqindia.india.sun.com/disk17/deployment/raghu/deployment_mustang_UR_teamware/deployment/src/plugin/Modality/src/ApplicationModalTest.html

This will pop-up lots of Application Modal dialogs.
b) Try dragging Applet to desktop by ALT+ Left Click.

Expected behavior:
Since Modal dialogs are blocking the applet - shouldnt allow to drag.
Current Behavior :
We are able to drag the applet. And Modal Dialog any more - not blocking Applet rather it blocks Browser.

Here is the NullPointerException from Java Console:

Exception occurred during event dispatching:
java.lang.NullPointerException
at ApplicationModalTestManual$3.run(ApplicationModalTestManual.java:123)
at java.awt.event.InvocationEvent.dispatch(Unknown Source)
at java.awt.EventQueue.dispatchEvent(Unknown Source)
at java.awt.EventDispatchThread.pumpOneEventForFilters(Unknown Source)
at java.awt.EventDispatchThread.pumpEventsForFilter(Unknown Source)
at java.awt.EventDispatchThread.pumpEventsForFilter(Unknown Source)
at java.awt.Dialog$1.run(Unknown Source)
at java.awt.Dialog$3.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at java.awt.Dialog.show(Unknown Source)
at java.awt.Component.show(Unknown Source)
at java.awt.Component.setVisible(Unknown Source)
at java.awt.Window.setVisible(Unknown Source)
at java.awt.Dialog.setVisible(Unknown Source)
at ApplicationModalTestManual$2.run(ApplicationModalTestManual.java:109)
at java.awt.event.InvocationEvent.dispatch(Unknown Source)
at java.awt.EventQueue.dispatchEvent(Unknown Source)
at java.awt.EventDispatchThread.pumpOneEventForFilters(Unknown Source)
at java.awt.EventDispatchThread.pumpEventsForFilter(Unknown Source)
at java.awt.EventDispatchThread.pumpEventsForFilter(Unknown Source)
at java.awt.Dialog$1.run(Unknown Source)
at java.awt.Dialog$3.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at java.awt.Dialog.show(Unknown Source)
at java.awt.Component.show(Unknown Source)
at java.awt.Component.setVisible(Unknown Source)
at java.awt.Window.setVisible(Unknown Source)
at java.awt.Dialog.setVisible(Unknown Source)
at ApplicationModalTestManual$1.run(ApplicationModalTestManual.java:80)
at java.awt.event.InvocationEvent.dispatch(Unknown Source)
at java.awt.EventQueue.dispatchEvent(Unknown Source)
at java.awt.EventDispatchThread.pumpOneEventForFilters(Unknown Source)
at java.awt.EventDispatchThread.pumpEventsForFilter(Unknown Source)
at java.awt.EventDispatchThread.pumpEventsForHierarchy(Unknown Source)
at java.awt.EventDispatchThread.pumpEvents(Unknown Source)
at java.awt.EventDispatchThread.pumpEvents(Unknown Source)
at java.awt.EventDispatchThread.run(Unknown Source)