When using the drag-and-drop technique with the Extract Splice segment mode (yellow arrow), the clip snaps to the play head just fine but when I try to snap it to an edit point it wants to land on a different spot. It's almost like there are invisible edit points in the timeline. Tried changing the timeline settings but still the same odd behavior. Is this a bug?

have you found a solution for this, I noticed the same annoying behaving from MC8.5

Core

I have noticed that graphically, it may not look like you are exactly hitting the cut point during the drag (like you might be a few frames off), but when you release the mouse the timeline is redrawn and the cut looks (and is) correct.

Is this the issue, or are you actually hitting the wrong spot?