Ok this is kind of funny.
See how it’s getting held up when it passes over the GUI.
Here is this fix. https://playground.babylonjs.com/#MELUXZ#3 What we want to do is turn off isPointerBlocker when the dragging starts and then turn it back on when the dragging ends. 
On a side note if you want to for some reason still be able to pick the gizmo behind the GUI BUT still want behaviour of clicking on the rectangle check out this thread. 2D Layer isPointerBlocker exception? - #6 by msDestiny14