Since you can’t drag it anyhow, I think it will most likely scare people into not using it, rather than making them discover the planar XY drag feature. I’d color fill the little planar drag box transparent blue instead, and hide the “arrow” (circle) that is pointing right at you/away from you
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Yes, this is a known issue. The design of the handles will change in the future, but this is not currently prioritized.