You are correct. It would appear to be a Bug in 3.2.5., and it would appear to have something to do with object in question.
As an example, I dragged a Bluebird and a Delivery Truck into a new world Setup. When I click on the truck, it is selected as expected, and if "Translation" is selected, I can drag it around.
This doesn't work with the Bluebird. If I click on it, the selection drops back to World. A possible work-around is to select this.bluebird from the dropdown, click the "Translation" button, move the mouse over one of the direction arrows until it changes color, and then click and drag the Arrow to move the bluebird in one direction or another.
This will work, but it's still a Bug.