Fill handle & drag-paste don't commit in Excel desktop

I have an issue where Excel's drag-to-fill and drag-to-copy/paste don't work, but everything else does. This started suddenly this morning after 2+ years of no issues, with no updates or new installs beforehand.

Symptoms:

• Select a cell, drag the fill handle down - the small preview tooltip correctly shows the next value in the sequence (e.g., 3, 4, 5) as I drag.

• When I release the touchpad, nothing appears in the cell. It stays blank.

• Same problem with drag-and-drop copy/paste within Excel: the drag works, but releasing doesn't commit anything.

• Regular copy → Paste (Ctrl+V) also fails to apply formatting, but Paste Values works fine.

• Fill Series via the ribbon (Home → Fill → Series) works correctly.

• Ctrl+D (fill down) does not work either.

What I've already tried (no change):

• Tested on a brand-new blank workbook

• Excel Safe Mode (excel /safe)

• New local Windows user profile

• Reset Office registry settings (HKCU\Software\Microsoft\Office\16.0\Excel)

• Full Office uninstall and reinstall

• sfc /scannow - found and repaired corrupted system files

• DISM /Online /Cleanup-Image /RestoreHealth - completed successfully

• Checked for Group Policy restrictions (none found)

• Checked for interfering background software (only Chrome and Excel running)

• Ruled out touchpad hardware since drag-and-drop works fine in File Explorer

• Checked "Enable fill handle and cell drag-and-drop" and "Show Paste Options button" settings - both as expected

• Confirmed no touchscreen/stylus, no ClickLock, no ITouch/gesture conflicts

What works:

• Excel Online - drag-fill and paste work perfectly

• Typing values manually

• Paste Values (Ctrl+Alt+V → Values)

• Fill Series dialog

System info:

• Windows, Microsoft Office LTSC Professional Plus 2024

• No recent updates, installs, or policy changes before the issue started

Contacted Microsoft Support directly, who were unable to resolve it and suggested posting here. Any ideas on what else could cause writes to fail specifically on drag-release while click-based commits work fine would be much appreciated.