I have not been able to rearrange favorites in on now for aa few days that I noticed. I did see that there was a similar problem with tvos back in January that was fixed so I waited to see if the latest beta version would fix it but the problem persists. I am using a shield pro device if that matters.
Not sure why that isn't working, but would recommend you abandon Favorites and use the new Collections to set them up. The old Favorites was very difficult to manage across multiple streaming devices, impossible to keep in sync, and was awkward to configure. With Collections, I created a Collection called Favorites which accomplishes the same thing but is much easier to setup and now I can change the contents and order from the server very easily, not to mention creating about 10 different collections for different types of favorites. Take a look at the announcement... it was just released a week ago.
I figured it out. I had changed the manage lineup settings. I don't know why but I assume that stopped my ability to arrange the channel blocks in Favorites.
I created a Faves Collection on my server, but my Fire TV app doesn't have a place to select Collections that I can find. So, I can't view my Faves Collection in the Guide or in the On Now page. What am I doing wrong?
After you create the collections, you have to add them to the clients using the clients tab on the web ui. After that, on my Android TV they show up in a drop down list above the channel list in Guide, and across the top of the screen on On Now. If you don't add them to the clients though, then you won't see any.
You just made my day! Thank you!