Thanks for the reply!
Yes, xfwm compositing is enabled on :0, but not on the VNC display. as 
vnc4server doesn't support glx.
Gonna try to disable compositing tomorrow and report back.
Sad to hear this is a limitation, as this wasn't an issue with any of the 
previous versions. (I'm also wondering, what's compositor on :0 got to do with 
movability of icons on a virtual display...)

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https://bugs.launchpad.net/bugs/662602

Title:
  Can not move icons on the desktop through a VNC session

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