Hi Carl, thanks for your quick reply.
The demo is rather a simplified version of the actual problem (which does not involve the behaviour with the hovering triggering the expansion), it was just a way of recreating my actual problem in a very simplistic fashion.
My actual use case, does use the hitTest() method to determine whether the container should expand or not, and that part of it works very smoothly. Its just that if that container expands by a large amount then your draggable object is suddenly nowhere near your mouse pointer.
Due to the way that my data is bound to the DOM elements, its not really possible to position the Draggable object absolutely, although I can see that would be a possible solution.
Apologies for the over simplified Code Pen as I think it caused some confusion.