diff --git a/apps/desktop-gpui/src/editor_canvas.rs b/apps/desktop-gpui/src/editor_canvas.rs
index 14618f7bea7..e39582dffa6 100644
--- a/apps/desktop-gpui/src/editor_canvas.rs
+++ b/apps/desktop-gpui/src/editor_canvas.rs
@@ -305,12 +305,10 @@ fn overlay_drag_center(
     } else {
         snap_moving_rect(raw, targets, 7. / canvas.0.max(1.), 7. / canvas.1.max(1.))
     };
-    let x = (raw.x + dx).clamp(0., 1.);
-    let y = (raw.y + dy).clamp(0., 1.);
     (
         XY {
-            x: (x + raw.w / 2.).clamp(0., 1.),
-            y: (y + raw.h / 2.).clamp(0., 1.),
+            x: (raw.x + dx + raw.w / 2.).clamp(0., 1.),
+            y: (raw.y + dy + raw.h / 2.).clamp(0., 1.),
         },
         guides,
     )
@@ -2003,6 +2001,59 @@ mod tests {
         assert!(guides.is_empty());
     }
 
+    #[test]
+    fn overlay_drag_preserves_pointer_motion_near_top_and_left_edges() {
+        let rect = NormRect {
+            x: -0.1,
+            y: -0.05,
+            w: 0.4,
+            h: 0.3,
+        };
+        for canvas in [(800., 450.), (450., 800.), (500., 500.)] {
+            let (center, guides) = overlay_drag_center(
+                rect,
+                canvas,
+                (canvas.0 * 0.02, canvas.1 * 0.03),
+                &SnapTargets::default(),
+                true,
+            );
+            assert!((center.x - 0.12).abs() < 1e-9, "{center:?}");
+            assert!((center.y - 0.13).abs() < 1e-9, "{center:?}");
+            assert!(guides.is_empty());
+        }
+    }
+
+    #[test]
+    fn overlay_drag_clamps_the_center_at_every_frame_edge() {
+        let rect = NormRect {
+            x: 0.3,
+            y: 0.35,
+            w: 0.4,
+            h: 0.3,
+        };
+        for (delta, expected) in [((-900., -1600.), 0.), ((900., 1600.), 1.)] {
+            let (center, _) =
+                overlay_drag_center(rect, (450., 800.), delta, &SnapTargets::default(), true);
+            assert!((center.x - expected).abs() < 1e-9, "{center:?}");
+            assert!((center.y - expected).abs() < 1e-9, "{center:?}");
+        }
+    }
+
+    #[test]
+    fn overlay_drag_applies_snapping_while_overhanging_the_frame() {
+        let rect = NormRect {
+            x: -0.09,
+            y: -0.1,
+            w: 0.2,
+            h: 0.4,
+        };
+        let targets = build_snap_targets(&[], None);
+        let (center, guides) = overlay_drag_center(rect, (450., 800.), (0., 0.), &targets, false);
+        assert!(center.x.abs() < 1e-9, "{center:?}");
+        assert!((center.y - 0.1).abs() < 1e-9, "{center:?}");
+        assert!(guides.iter().any(|guide| guide.axis == GuideAxis::V));
+    }
+
     #[test]
     fn the_display_clamp_lets_half_the_card_hang_out() {
         let rect = NormRect {