I cannot use my TTWin3 session until I exit FTP Drag & Drop, why?

This is the way that all file transfers are handled within TTWin3.

If you prefer, you can launch TTWin3's FTP as a stand alone application. This is done be running ttftp.exe in the program folder, which, by default, is located in C:\Program Files\Turbosoft\TTWin3\Bin32