The expand Icon of the treeview node is being reset, if another node is dropped above/below it.
To reproduce this behavior you can take the Drag and Drop demo of the treeview. In the initial state the "Furniture" node is expanded. If you take the "Decor" node and drop it above the furniture node, the "Furniture" node stays expanded but the icon changes to collapsed.
ADMIN EDIT: workaround: https://dojo.telerik.com/@bratanov/aLigiWaz
The issue does not manifest with R3 2019 SP1.
You can also monitor it in the following GitHub issue: https://github.com/telerik/kendo-ui-core/issues/4820