Interestingly, mouse wheel scroll events work properly. Such events always include the window the mouse is over (when mouse-wheel-follow-mouse is t, which it is by default). They select this window and then scroll that window, so I can move the mouse across frames and scroll arbitrary windows, which suggests that drag events should operate similarly and include the window of the drag release.
Now to find out how the position of the mouse is used differently in mouse drags compared to mouse wheel events.
Bob