A little bit of an update:
I just added an extra action to set the Z value to 0 and that worked, but I'm still having the issue where if I move the mouse too fast the icon just goes back to the middle of the map (figured out this wasn't just going back to where it started, but just the middle of the screen).
I also don't like this option for editing the Z value, since I may want to have an object at, say, Z=10. I just simply don't want the Z value touched unless I specify it specifically.
Edit:
I've attached 3 screenshots:
Actions.jpg: The actions in "Start Following"
Example2.jpg: The flowchart
Example3.jpg: The actions in "Check if movable object"
When this bug occurs, the flowchart has never left "Start Following" prematuraly (though the object stops following it and appears in the center of the screen) and leaves it properly on mouse up. I can then drag the object again, dropping it where i want. If I move my mouse slow it works fine, but if I ever mouse it fast, it bugs out to the middle and stops following.
The bug is similar to the example MouseClickToDrag if you try to drag it off the plane (but does not repro in the MouseClickToDrag just by moving the mouse fast).