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I see what you are saying but there is no real 'in between' because the item above or below remains highlighted and that is where the book is reasonably expected to go. The 'in between' indication doesn't become just a simple (thin) line on which to drop a book. The highlight should disappear when 'in between' is selected to avoid confusion. It's a visual thing, you can drop your book as soon as the highlight appears, almost without looking - except you can't, you have to look closely.
This is because the effective area of the blue box is reduced significantly. If the item is highlighted and my cursor is visibly INSIDE the highlight then that is where I expect it to go.
I am not sure why anybody would choose 'in between' to add a book to the parent folder.
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