Well, it doesn't work in Xy4 either, in VA$DT=4. Never has.
Not properly anyway: it freezes in the middle of lines. But
nobody uses Xy4 Graphic view anyway, so... who cares. Yeah, I
can reproduce that in NB: What's happening is the same thing
that happens in Xy4: it freezes in the middle of the line; but
because they've not restricted the LR cursor to the current
line, but rather allowed it to wrap (not allowed in Xy4), the
effect is that it floats down to the next line, continues until
it hits a wall, floats down, ... etc. The effect is diagonal.
Why use it? The ordinary CR cursor moves so fast in NB, you can
hardly see it.