This is a new behavior and this absolutely makes squeezing chicken very difficult (or pulling stuff into inventory from a distance).
1. Chickens: Most chickens start flying when you go near them. To squeeze them easily and quickly, I normally click on the grain icon from a distance away. But now, that click makes me go near the chicken and then popup the menu instead of squeezing directly. With the reduced squeeze amount, this essentially makes squeezing chickens a whole lot more tiresome.
2. A lot of times, when stuff was high (on trees, ledges etc) we could drag the item even if we were not directly under the item. Now the same action causes us to move to under the item (which, if it happens to be over empty space will cause us to fall down and hence lose focus. Additionally, the distance from where you can drag has been massively reduced.
My appeal: Please remove both these behaviors. This is the first time I've ever asked for a rollback because this really takes away useful functionality that existed before.