When you run Windows 11 Folder Color Changer as an administrator, the app runs with elevated privileges. This means that the app is running at a higher privilege level than Windows Explorer, which is responsible for handling drag and drop operations. As a result, drag and drop operations between Windows Explorer and Windows 11 Folder Color Changer in this elevated state are not permitted. This behaviour is by design and has been the case since Windows Vista. You can read more about it here.

As a workaround, remember that you can simply click the target icon in Windows 11 Folder Color Changer to capture any selected folders in Windows Explorer (this only applies to folders selected in Windows Explorer, not folders that you are trying to drag from the navigation pane).