Internet Explorer 11 hosting a Drag & Drop ActiveX control advances from onDragEnter to OnDrop instead of onDragEnter -> onDragOver on Windows 10 x86 and x64 iexplore processes.

Is there a workaround that exists?
Yes. This is how I fixed it and has worked from Windows 7 to Windows 10.

Please refer to the attached sample ActiveX control named: MyActiveXControl.ZIP
File Name: DropSource.h
Function Name: HRESULT CDropSource::QueryContinueDrag(BOOL fEscapePressed, DWORD grfKeyState);

WORKAROUND 1
============
Instead of relying on grfKeyState, I checked the mouse button state using GetKeyState() API and return DRAGDROP_S_DROP when the mouse button is released. I have tested it and it works fine.// Modified QueryContinueDrag() codeHRESULT CDropSource::QueryContinueDrag(BOOL fEscapePressed, DWORD grfKeyState)
{
DWORD my_grfKeyState  = 0;
// If the high-order bit is 1, the key is down; otherwise, it is up.
if((GetKeyState(VK_LBUTTON) & 0x80) != 0)
{
my_grfKeyState = 1;
}

TCHAR buffer[100];
swprintf_s(buffer, 100, L”grfKeyState is: %d”, grfKeyState);

::OutputDebugString(buffer);
swprintf_s(buffer, 100, L”my_grfKeyState is: %d”, my_grfKeyState);
::OutputDebugString(buffer);

if (fEscapePressed)
{
::OutputDebugString(L”DRAGDROP_S_CANCEL”);
return DRAGDROP_S_CANCEL;
}

if (!(my_grfKeyState & (MK_LBUTTON | MK_RBUTTON)))
{
::OutputDebugString(L”DRAGDROP_S_DROP”);
return DRAGDROP_S_DROP;
}

::OutputDebugString(L”S_OK”);
return S_OK;
}

WORKAROUND 2
============
I made some changes in CDropSource::QueryContinueDrag() (see below) to test PeekMessage(). PeekMessage seems to be working fine. So the only anomaly what we see in case of the ActiveX hosted in IE11, is for the first time when grfKeyState never changes to 1 from 0.
if ((msg.message >= WM_MOUSEFIRST) && (msg.message <= WM_MOUSELAST)) never becomes TRUE.

HRESULT CDropSource::QueryContinueDrag(BOOL fEscapePressed, DWORD grfKeyState)
{
TCHAR buffer[100];
MSG msg;
DWORD my_grfKeyState  = 0;

    swprintf_s(buffer, 100, L”my_grfKeyState before PeekMessage is: %d”, my_grfKeyState);
::OutputDebugString(buffer);
//auto HaveAnyMouseMessages = [&]() -> BOOL
//{
//    return PeekMessage(&msg, 0, WM_MOUSEFIRST, WM_MOUSELAST, PM_REMOVE);
//};

    // Busy wait until a mouse or escape message is in the queue
while (!PeekMessage(&msg, 0, WM_MOUSEFIRST, WM_MOUSELAST, PM_REMOVE))
{
// Note: all keyboard messages except escape are tossed. This is
// fairly reasonable since the user has to be holding the left
// mouse button down at this point. They can’t really be doing
// too much data input one handed.
if ((PeekMessage(&msg, 0, WM_KEYDOWN, WM_KEYDOWN, PM_REMOVE)
|| PeekMessage(&msg, 0, WM_SYSKEYDOWN, WM_SYSKEYDOWN, PM_REMOVE))
&& msg.wParam == VK_ESCAPE)
{
fEscapePressed = TRUE;
break;
}
}

    if (!fEscapePressed)
{
if ((msg.message >= WM_MOUSEFIRST) && (msg.message <= WM_MOUSELAST))
{
my_grfKeyState = GetControlKeysStateOfParam(msg.wParam);
swprintf_s(buffer, 100, L”my_grfKeyState after PeekMessage is: %d”, my_grfKeyState);
::OutputDebugString(buffer);
}
}

    DWORD my_grfKeyState1  = 0;
if((GetKeyState(VK_LBUTTON) & 0x80) != 0)
{
my_grfKeyState1 = 1;
}
//// DWORD my_grfKeyState = GetAsyncKeyState(VK_LBUTTON); //GetKeyState(VK_LBUTTON);

    swprintf_s(buffer, 100, L”my_grfKeyState1 from GetKeyState() is: %d”, my_grfKeyState1);
::OutputDebugString(buffer);
//swprintf_s(buffer, 100, L”my_grfKeyState is: %d”, my_grfKeyState);
//::OutputDebugString(buffer);if (fEscapePressed)
{
::OutputDebugString(L”DRAGDROP_S_CANCEL”);
return DRAGDROP_S_CANCEL;
}

    // if (!(my_grfKeyState & (MK_LBUTTON | MK_RBUTTON)))
// if(my_grfKeyState == 0 && grfKeyState == 0)
if (!(my_grfKeyState & (MK_LBUTTON | MK_RBUTTON)))
{
::OutputDebugString(L”DRAGDROP_S_DROP”);
return DRAGDROP_S_DROP;
}

     ::OutputDebugString(L”S_OK”);
return S_OK;
}

Output:

[8452] OnLButtonDown
[8452] GetUIObjectOfFile succeeded
[8452] DoDragDrop
[8452] my_grfKeyState before PeekMessage is: 0
[8452] my_grfKeyState after PeekMessage is: 1
[8452] my_grfKeyState1 from GetKeyState() is: 1
[8452] S_OK
[8452] my_grfKeyState before PeekMessage is: 0
[8452] my_grfKeyState1 from GetKeyState() is: 1
[8452] DRAGDROP_S_DROP

Test Results
=========
Operating System: Windows 8.1 x64 (Version 6.3, Build: 9600)
ole32.dll version: 6.3.9600.18256

Issue exists with this version.

Downloaded https://support.microsoft.com/en-us/kb/3179574
Installed this KB. Restarted the machine.
ole32.dll version: 6.3.9600.18403

Issue not reproducible.