Yeah, this is a bit odd.
What I would expect is that if you click on the TCMD window and then drag out, that it keeps the mouse 'grab' for the TCMD window until you release the mouse or move back into the window. But if you click outside of the TCMD window, nothing should happen within TCMD at all.
If you click outside the TCMD window, then drag into the TCMD window, you don't start selecting text anyway (at least, I haven't been able to here), so the 'feature' is a bit useless anyway. Normally selection only starts if you click inside the window.
So, I don't really see how this feature can be at all useful, other than as an unconventional way to pause the TCC output in a TCMD tab.
I'd expect that the way TCC (and CMD) work would be the right way - which is to pause the output while selection is held (even if you then drag out of the window).