Hey thanks a bunch - that worked!
I even phrased my problem incorrectly and you wisely gave the right answer.
I incorrectly said the event block still executes when playerInput is false. Well, no, the event block doesn't get executed, like you said.
What I was really wanting to find out was why the drag start still happens and the sprite still gets dragged. And that dragging was what I was trying to prevent. I'm realizing that the DragDrop behavior has its own code it's executing and to alter what it's doing I gotta use the Drop action.
Thanks again.