diff --git a/packages/block-editor/src/components/use-block-drop-zone/index.js b/packages/block-editor/src/components/use-block-drop-zone/index.js
index 07107b7f0b73ba..55884f4a7792d0 100644
--- a/packages/block-editor/src/components/use-block-drop-zone/index.js
+++ b/packages/block-editor/src/components/use-block-drop-zone/index.js
@@ -515,6 +515,23 @@ export default function useBlockDropZone( {
 		200
 	);
 
+	/**
+	 * Checks if the given element is an insertion point.
+	 *
+	 * @param {EventTarget|null} targetToCheck - The element to check.
+	 * @param {Document}         ownerDocument - The owner document of the element.
+	 * @return {boolean} True if the element is a insertion point, false otherwise.
+	 */
+	function isInsertionPoint( targetToCheck, ownerDocument ) {
+		const { defaultView } = ownerDocument;
+
+		return !! (
+			defaultView &&
+			targetToCheck instanceof defaultView.HTMLElement &&
+			targetToCheck.dataset.isInsertionPoint
+		);
+	}
+
 	return useDropZone( {
 		dropZoneElement,
 		isDisabled,
@@ -525,7 +542,18 @@ export default function useBlockDropZone( {
 			// https://developer.mozilla.org/en-US/docs/Web/API/Event/currentTarget
 			throttled( event, event.currentTarget.ownerDocument );
 		},
-		onDragLeave() {
+		onDragLeave( event ) {
+			const { ownerDocument } = event.currentTarget;
+
+			// If the drag event is leaving the drop zone and entering an insertion point,
+			// do not hide the insertion point as it is conceptually within the dropzone.
+			if (
+				isInsertionPoint( event.relatedTarget, ownerDocument ) ||
+				isInsertionPoint( event.target, ownerDocument )
+			) {
+				return;
+			}
+
 			throttled.cancel();
 			hideInsertionPoint();
 		},
diff --git a/packages/compose/src/hooks/use-drop-zone/index.js b/packages/compose/src/hooks/use-drop-zone/index.js
index d155978110342f..c570c034415923 100644
--- a/packages/compose/src/hooks/use-drop-zone/index.js
+++ b/packages/compose/src/hooks/use-drop-zone/index.js
@@ -108,22 +108,6 @@ export default function useDropZone( {
 				return false;
 			}
 
-			/**
-			 * Checks if the given element is an insertion point.
-			 *
-			 * @param {EventTarget|null} targetToCheck - The element to check.
-			 * @return {boolean} True if the element is a insertion point, false otherwise.
-			 */
-			function isInsertionPoint( targetToCheck ) {
-				const { defaultView } = ownerDocument;
-
-				return !! (
-					defaultView &&
-					targetToCheck instanceof defaultView.HTMLElement &&
-					targetToCheck.dataset.isInsertionPoint
-				);
-			}
-
 			function maybeDragStart( /** @type {DragEvent} */ event ) {
 				if ( isDragging ) {
 					return;
@@ -187,17 +171,6 @@ export default function useDropZone( {
 					return;
 				}
 
-				// If we're moving in/out of an insertion point then don't trigger
-				// the onDragLeave event. This is to prevent the dropzone from
-				// trigger any unwanted side effects when the user is likely to
-				// be moving the cursor quickly over the insertion point.
-				if (
-					isInsertionPoint( event.relatedTarget ) ||
-					isInsertionPoint( event.target )
-				) {
-					return;
-				}
-
 				if ( onDragLeaveRef.current ) {
 					onDragLeaveRef.current( event );
 				}