Try max-height, and polish.

packages/block-editor/src/components/block-draggable/style.scss

@@ -47,15 +47,24 @@
 
 // This creates a "slot" where the block you're dragging appeared.
 // We use !important as one of the rules are meant to be overriden.
-.is-dragging {
+.block-editor-block-list__layout .is-dragging {
 	background-color: currentColor !important;
 	opacity: 0.05 !important;
 	border-radius: $radius-block-ui !important;
 
+	// We apply a max-height so that when dragging big selections, you don't have to drag by a tall slot.
+	max-height: 240px !important;
+	overflow: hidden !important;
+
 	// Disabling pointer events during the drag event is necessary,
 	// lest the block might affect your drag operation.
 	pointer-events: none !important;
 
+	// Hide the multi selection indicator when dragging.
+	&::selection {
+		background: transparent !important;
+	}
+
 	&::after {
 		content: none !important;
 	}