Hi, James. It has been a long time since used Outlook so I hope I am remembering this correctly, apologies if I've got it wrong.
You can only drop items into MLO from Outlook if the cursor is positioned in a task list. If the pointer is positioned over an MLO item that becomes highlighted, you will drop the item as a child of the highlighted task. If a blue line forms between two items in the MLO task list then the outlook item will drop as a sibling, the arrows at the end of the blue line show you whether the new task will be a sibling of the task above or the task below. If you drop it someplace else (not on a task and not between tasks) the item will just evaporate and will not lodge into the task list anywhere.
-Dwight