if you comment
if(target && target.tree) this.tree.select(target);you don't see node selection, blue dotted line will work. You can add some style when node in drop inside position:
onDrop: function(){
if(this.inside){
this.inside.getDOM('name').style.border = 'none';
this.inside = null;
}
},
onDrag: function(){
if(this.where == 'inside') {
if(this.inside) this.inside.getDOM('name').style.border = 'none';
this.inside = this.target;
this.target.getDOM('name').style.border = 'dashed 1px green';
}else if(this.inside){
this.inside.getDOM('name').style.border = 'none';
this.inside = null;
}
}