Same tip as @gxsgirl95 and it's brilliant. I can actually use the sidebar again.
I still can't drag anything to that top section, but at least OneDrive doesn't constantly expand to take up the full height of the sidebar.
Correction: I confused two settings. The one @neil vectorr.com's suggests is interesting but it seems to disable Quick Access.
It's this setting that makes the top section behave the way I want it:
File Explorer > Folder Options > View > Navigation Pane > untick "Expand to open folder"