dragging video from Photos app?

It is the intended behaviour, as described in: Add photos and videos from the Photos app to your iMovie project - Apple Support :

"If you drag a video directly from the Photos app into the iMovie timeline, it appears in your project as a still image."

I don't think that it is anything to "fix" actually. You can drag photos from the Photos app library directly into iMovie, but videos have a different way.

The recommended way to import videos into iMovie from the Photos app is first to designate your Photos library as the System Photo Library in the Photos app general preferences, and then drag the video into iMovie from the Photos item in the media sidebar of an iMovie project.

Another way is to drag the video to your desktop and from there drag it into an iMovie project.

-- Rich

Although it does seem curiously arbitrary. 😋 I don't know who would ever want to drag in their video as a still image.

-- Rich