In fact I can no longer drag-n-drop ANYTHING, even existing bookmarks in the bookmarks toolbar.

Not an intentional change.

I assume you already did a regular quit/restart of Firefox and that didn't help?

Could you test in Firefox's Troubleshoot Mode? This article has the details: Diagnose Firefox issues using Troubleshoot Mode (note: use Open not Refresh/Reset).

Did you try to close and restart Firefox or reboot?

I also tried troubleshooting mode, but even there I couldn't drag/drop anything. Restarting Firefox did not help either, but a reboot of the entire system did. Thanks for the heads up.