I am also having this issue in 16.04, std/default desktop install.
Here's a work-around. Edit the ~/Desktop/xxxx.desktop file to remove
the "URL" entry (e.g. change "URL=http..." to "xxURL=http...").
(Perhaps also need to change the "Type-=Link" line as well -- not sure.)
Doing this made the desktop icon movable for me. Once you have the icon
where you want it, undo the edits of the *.desktop file.
So it seems to be the presence of the URL entry in the *.desktop file
which causes the problem.
** Changed in: nautilus (Ubuntu Xenial)
Status: Triaged => Confirmed
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https://bugs.launchpad.net/bugs/1278437
Title:
can't move link type .desktop files around on desktop
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