To reproduce:
for (int i = 0; i < 10; i++)
{
   this.radTreeView1.Nodes.Add("Node1." + i);
}
this.radTreeView1.AllowDragDrop = true; 

this.radTreeView1.TreeViewElement.DragDropService.ShowDragHint = false;


Workaround: this.radTreeView1.TreeViewElement.DragDropService.PreviewDragHint += DragDropService_PreviewDragHint;

private void DragDropService_PreviewDragHint(object sender, PreviewDragHintEventArgs e)
{ 
    e.UseDefaultHint = false;
}