The "Next" Button won't change state if I have 1 wrong in a drag and drop exercise.

Even if I get all of them correct on the first try, it doesn't work for me, which is consistent with my reading of this trigger.

When you click an item, it changes to selected state, but when you drop it, it changes to Drop Correct or Drop Incorrect. The only way I can get it to work is to click all the items without dragging them, or going back and clicking all of them after they are dropped.  Your post doesn't say you want NEXT to be activated when they are selected, but when they are dropped correctly, so I think you want to change Selected to Drop Correct.

I found other problems. Some of the targets were not interacting correctly with some of the objects. I rebuilt all the targets from scratch, re-created the triggers, and that helped some.

There is still one problem. If you drop an object in the wrong target, all the other objects are reset to Normal state, even if they are correctly dropped. If you drop all of them only in the correct target, everything works.

I also noticed some peculiar behavior while working with the triggers, which makes me think some of the objects are corrupted. I changed some triggers, and when I went to change them back, they defaulted to the original options, which is not normal behavior. Some of them when changed auto-changed the name of the object and attached themselves to the wrong object.

If it were mine, I would reconstruct everything from scratch (without copying anything) and see if that cleared it up. If not, submit a case to support.

The triggers misbehaving is very characteristic of corruption, but the objects changing state could be either corruption or a bug.

Sorry to be the bearer of such bad news.