You need to restore an item from the trash — by right-clicking and choosing "Restore to Library" — for it to appear anywhere else in the library. It's actually a bug that you can drag from the trash to a collection, and we'll fix that. Issue created.

Given that items in the trash still exist in collections but are hidden from them, it doesn't really make sense to allow items to be dragged to other collections, because if that restored them they'd still exist in their previous collections, which is confusing and might not be what was intended. It might make sense to allow you to drag an item from the trash back to the library root, which would be equivalent to restoring via right-click and would simply restore the item to its previous collections.

We'll definitely do it for the library root, but it's conceptually complicated to allow it for collections. It would either have to restore the item to all other collections, which might not be what the user intended (given that they deleted it to begin with), or it would have to remove it from other collections, which is inconsistent with just restoring it from the trash and sort of unsettling to do automatically.