OK that sounds like a straightforward IE10 does not support dragging of text, only dragging of files (I've not been able to test this myself).
The jsfiddle is a vastly simplified version of the drag & drop code from Moodle, created to make it easier to solve incorrectly reported drag types in different browsers. So if it doesn't work on that site, it won't work in Moodle (nor is it possible to make it work in Moodle).
Out of curiosity, does dragging links work (e.g. from the chrome address bar, or from a link on a page?)