I also couldn’t get this to work but I’ve finally found a workaround. These steps require you to change DragControls.js:
Change the line: _plane.setFromNormalAndCoplanarPoint( _camera.getWorldDirection( _plane.normal ), _worldPosition.setFromMatrixPosition( object.matrixWorld ) );
To _plane.setFromNormalAndCoplanarPoint( {x: -10e-7, y: -1, z: 1e-7}, _worldPosition.setFromMatrixPosition( object.matrixWorld ) );