Sorry for being dense.
I assume that "The button works when the box is checked, but it does not when it is not checked" means "The [right] button works [to click and drag], but it [the right button] does not when it is not checked. That is how things are supposed to work.
I take it when the box is NOT checked, you can't click and drag at all.
Perhaps (no guarantee) this will work (with the box NOT checked):
In Windows Explorer, click a file with the left mouse button and keep the button held down. Then press the Escape key. Drag and drop is miraculously re-enabled.
If that doesn't work, try clicking a file with the right mouse button and keeping the button down while pressing Escape. I've seen this variant also.
Because that "fix" is only supposed to re-enable drag & drop and you mentioned that the right-click context menu opened when you clicked the left button, you may have something else going on ... but it shouldn't hurt to try.
If neither of those things work, sorry, but I'm out of ideas.