Adding my vote that this needs fixing. This is a big issue for less experienced users, but even very experienced users such as myself occasionally will accidentally drop a file/folder being dragged into an unintended folder. It's so easy to happen, just
takes a momentary loss of contact with a trackpad, or let up on pressure on the mouse while moving it. Also a big accessibility issue for some people who can't reliably do the rather intricate physical motions involved: click, drag, drop, while monitoring
small icons on the screen.
I would prefer to have an option that doesn't allow moving an icon (file/folder) into a folder icon at all. Instead, to move a file you would need to open a second window and navigate into that folder, then drag between the windows.
Failing that, a confirmation dialog should appear whenever moving an icon into a folder icon. I prefer to NOT get this dialog if just dragging between windows.