Per my test, I can drag the image in the page even though Image renditions option is used on this image.
You can narrow down your issue as following:
What’s the browser you used to open SharePoint pages? Try to cleat browser cache and switch to another browser to check again.
What’s the kind of page you used? Try to create a new blank page and check again....
I can reproduce your issue in my environment. It seems a default behavior.
Since "All documents" view and "Show Toolbar" have conflict, and it causes the Toolbar type changed in the source of library.
As a workaround, you can edit the source document library page and edit the web part to switch the Toolbar type to "Full Toolbar".
To Create a Content Type using PnP PowerShell, you need to use the command like given below:
Add-PnPContentType -Name "Project Document" -Description "Use for Contoso projects" -Group "Contoso Content Types" -ParentContentType $ct
Check below article for syntax and list of parameters and their description:
For official documentation ...