FULL PRODUCT VERSION :
JDK 8u121 b13

ADDITIONAL OS VERSION INFORMATION :
macOS 10.12.3

A DESCRIPTION OF THE PROBLEM :
Drag gestures are not working if a drag&drop supporting component (JList or JTable for instance) is installed in JDialog that is overlapping JFrame. Specifically, if the mouse pointer is within the parent window bounds when the drag is initiated, it doesn't work. If the dialog is moved aside from its parent window, the drag operation works.

Last worked in version 8u112

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
1. Compile and run the attached test case "JArrangeCheckBoxList.java".
2. Attempt to drag list items on the displayed dialog window.