diff --git a/app/designer/features/sidebar-left/sidebar-left.tsx b/app/designer/features/sidebar-left/sidebar-left.tsx
index c50c946a5e..1db1ba9b93 100644
--- a/app/designer/features/sidebar-left/sidebar-left.tsx
+++ b/app/designer/features/sidebar-left/sidebar-left.tsx
@@ -40,13 +40,17 @@ export const SidebarLeft = ({
 
   const close = useCallback(() => setActiveTab("none"), []);
   useSubscribe<"clickCanvas">("clickCanvas", close);
-  useSubscribe("dragStartInstance", close);
+  useSubscribe("dragStartInstance", () => {
+    // We can't close the sidebar if we are dragging from the sidebar
+    if (isDragging === true) return;
+    close();
+  });
 
   const handleDragChange = useCallback(
     (isDragging: boolean) => {
       // After dragging is done, container is going to become visible
       // and we need to close it for good.
-      if (isDragging === false) close();
+      if (isDragging === false) setActiveTab("none");
       setIsDragging(isDragging);
       onDragChange(isDragging);
     },