Drag/drop within widget gets mis-aligned in a 2nd row of tags

Dragging and dropping terms within the widget becomes squirrelly once the widget has had to grown in height to accommodate a second row of widgets (whitespace appears to the left of a tag you try to move down to the 2nd row - there may be other symptoms). See the attached .mov file.

Edit - note that this does not happen on the 7.x-2.x branch.