Yes, it just doesn’t work when the tree is filtered.
Microsoft does a bad job with recording mouse clicks, Adobe didn’t support filtering properly.
Alternatives exist, and it’s good we have them. Thanks again for the report and being vocal.

Thanks again for the reply. In the video at :40, the caption says, "and dragging does nothing." This means I'm trying to drag there.

Microsoft's POS screen-capture tool doesn't allow you to show mouse-clicks. You have to bring the screen grab into an editing tool and laboriously add indications every time you want the viewer to know you're doing something. It's truly pathetic.

Meanwhile, we're moving away from Adobe garbage as fast as we can. The fact that this product made it out the door in this condition is bad enough; but for it to stay this way for decades is insulting.

Adobe should have open-sourced Illustrator 20 years ago, since it's basically abandonware at this point.

Not seeing you trying to reposition highlighted items in the end of this video, after 0:37... I see you highlighting them and tried to right-click (and it does nothing in Ai — here’s a request, https://illustrator.uservoice.com/forums/333657/suggestions/31956982). What I do is click with left and drag these into a layer / group / position I need. So it’s about reordering.

Instead of utilizing right-click, Ai often relies on panels’ menus. We can thank one-button Mac mouse for that, I think... however, Ps does the same but also allows right-click, and Ai lags.
BTW, if you need right-click to work there, you might also want to upvote these:
1. "Move to Layer" in right-click menu — https://illustrator.uservoice.com/forums/333657/suggestions/42913461
2. Right click to select layer — https://illustrator.uservoice.com/forums/333657/suggestions/34613410
3. and the rather general Right Click In General (notably context menus) — https://illustrator.uservoice.com/forums/333657/suggestions/46925695
There are many more of them, and some of them need to be merged definitely.

Speaking of this Layers list — it was pretty functional, it’s just Ai team doesn’t update it much.
We got filtering (that breaks range selection, as you know), we got better UI for saved selections (which aren’t linking, as was requested too — won’t share another link, I think I pile too much of these), but not many other things we desperately need.
The only way I see is to upvote, request, report... or not use the software at all, sadly. I prefer fighting, but I can’t force you do the same.
So — thank you for your time anyway! Every vote counts.

I don't know how you "reposition" them. Dragging in the list does nothing. See the end of my video.

It's astounding how Adobe managed to make a list this dysfunctional.

I mean something like this. Select (highlight) some objects in the panel, reposition them
I totally agree it’s rather limited, but you don’t have to select something on canvas to reposition it in the object tree. I’d love an option to 'select on canvas when selecting in the panel' and/or a way to convert a panel selection into a canvas selection (and vice versa) — requested here: https://illustrator.uservoice.com/forums/333657/suggestions/32505679 — but completely removing something is a very bad practice. Improve, make an option — good one.

Thanks for the reply, Egor. But I don't understand this about the layer-"highlighting:"

"It allows you to reorganize your structure without actually selecting stuff on canvas. It’s super important for large docs."

How? There's no context menu and dragging does nothing. There are no apparent actions you can take on the highlighted layers.

The 'layer highlighting', that 'is useless'.
Nope, it’s not, at least not entirely. It allows you to reorganize your structure without actually selecting stuff on canvas. It’s super important for large docs.

However, while it was very normal back then, today it’s super unpopular, and there is a separate request to allow to have it synced, Select items in Layers in sync with objects on canvas — https://illustrator.uservoice.com/forums/333657/suggestions/45338959
It mentions several more related requests, please study them as well.

Yep, it’s all the same problems reported separately here:
— Shift-clicking in Layers doesn't select range if filter is used: https://illustrator.uservoice.com/forums/601447/suggestions/51241408
— Allow to select objects as a range in Layers (Shift, Cmd/Ctrl) with proper square markers, not only with Target Appearance ones: https://illustrator.uservoice.com/forums/333657/suggestions/51241837
You upvoted both of them already.
Perhaps you might also be interested in this request as well:
Select objects in Layers panel by dragging through items (or target or selection markers) with a modifier held — https://illustrator.uservoice.com/forums/333657/suggestions/31666297

Attempting another attachment of the screen grab...

Sure. Screen grab attached. Interestingly, I was able to capture range-selection working... which is extremely rare. But only without a filter. With a filter, it's still totally broken.

And it also doesn't work when using the (unlabeled) "selection" boxes. Instead, it inexplicably requires the circles.

And finally,, there's still the bizarre and useless "highlighting" of layers in the list. There is no apparent purpose to it, since there's no context menu, and the items aren't really selected.

I hope Adobe takes these rather crippling defects seriously. For some documents, this problem wastes HOURS. No exaggeration.

OK... WHAT DID IT DO WITH MY FILE ATTACHMENT?

Oscar, I’ve seen all the comments in all the entries here.
Can you please share more details on how it fails ('selecting' these with the target markers)?
I suppose you don’t have any filter applied in Layers although... Can you share a test file and a video recording of you trying to select objects?