diff --git a/packages/block-editor/src/components/list-view/test/use-list-view-drop-zone.js b/packages/block-editor/src/components/list-view/test/use-list-view-drop-zone.js
new file mode 100644
index 00000000000000..0e5cdcf2e26c24
--- /dev/null
+++ b/packages/block-editor/src/components/list-view/test/use-list-view-drop-zone.js
@@ -0,0 +1,188 @@
+/**
+ * Internal dependencies
+ */
+import { getListViewDropTarget } from '../use-list-view-drop-zone';
+
+describe( 'getListViewDropTarget', () => {
+	const blocksData = [
+		{
+			blockIndex: 0,
+			canInsertDraggedBlocksAsChild: true,
+			canInsertDraggedBlocksAsSibling: true,
+			clientId: 'block-1',
+			element: {
+				getBoundingClientRect: () => ( {
+					top: 50,
+					bottom: 100,
+					left: 10,
+					right: 100,
+					x: 10,
+					y: 50,
+					width: 90,
+					height: 50,
+				} ),
+			},
+			innerBlockCount: 1,
+			isDraggedBlock: false,
+			isExpanded: true,
+			rootClientId: '',
+		},
+		{
+			blockIndex: 0,
+			canInsertDraggedBlocksAsChild: true,
+			canInsertDraggedBlocksAsSibling: true,
+			clientId: 'block-2',
+			element: {
+				getBoundingClientRect: () => ( {
+					top: 100,
+					bottom: 150,
+					left: 10,
+					right: 100,
+					x: 10,
+					y: 100,
+					width: 90,
+					height: 50,
+				} ),
+			},
+			innerBlockCount: 0,
+			isDraggedBlock: false,
+			isExpanded: false,
+			rootClientId: 'block-1',
+		},
+		{
+			blockIndex: 1,
+			canInsertDraggedBlocksAsChild: true,
+			canInsertDraggedBlocksAsSibling: true,
+			clientId: 'block-3',
+			element: {
+				getBoundingClientRect: () => ( {
+					top: 150,
+					bottom: 150,
+					left: 10,
+					right: 100,
+					x: 10,
+					y: 150,
+					width: 90,
+					height: 50,
+				} ),
+			},
+			innerBlockCount: 0,
+			isDraggedBlock: false,
+			isExpanded: false,
+			rootClientId: '',
+		},
+	];
+
+	it( 'should return the correct target when dragging a block over the top half of the first block', () => {
+		const position = { x: 50, y: 70 };
+		const target = getListViewDropTarget( blocksData, position );
+
+		expect( target ).toEqual( {
+			blockIndex: 0,
+			clientId: 'block-1',
+			dropPosition: 'top',
+			rootClientId: '',
+		} );
+	} );
+
+	it( 'should nest when dragging a block over the bottom half of an expanded block', () => {
+		const position = { x: 50, y: 90 };
+		const target = getListViewDropTarget( blocksData, position );
+
+		expect( target ).toEqual( {
+			blockIndex: 0,
+			dropPosition: 'inside',
+			rootClientId: 'block-1',
+		} );
+	} );
+
+	it( 'should nest when dragging a block over the right side and bottom half of a collapsed block with children', () => {
+		const position = { x: 70, y: 90 };
+
+		const collapsedBlockData = [ ...blocksData ];
+
+		// Set the first block to be collapsed.
+		collapsedBlockData[ 0 ] = {
+			...collapsedBlockData[ 0 ],
+			isExpanded: false,
+		};
+
+		// Hide the first block's children.
+		collapsedBlockData.splice( 1, 1 );
+
+		const target = getListViewDropTarget( collapsedBlockData, position );
+
+		expect( target ).toEqual( {
+			blockIndex: 0,
+			dropPosition: 'inside',
+			rootClientId: 'block-1',
+		} );
+	} );
+
+	it( 'should drag below when dragging a block over the left side and bottom half of a collapsed block with children', () => {
+		const position = { x: 30, y: 90 };
+
+		const collapsedBlockData = [ ...blocksData ];
+
+		// Set the first block to be collapsed.
+		collapsedBlockData[ 0 ] = {
+			...collapsedBlockData[ 0 ],
+			isExpanded: false,
+		};
+
+		// Hide the first block's children.
+		collapsedBlockData.splice( 1, 1 );
+
+		const target = getListViewDropTarget( collapsedBlockData, position );
+
+		expect( target ).toEqual( {
+			blockIndex: 1,
+			clientId: 'block-1',
+			dropPosition: 'bottom',
+			rootClientId: '',
+		} );
+	} );
+
+	it( 'should drag below when attempting to nest but the dragged block is not allowed as a child', () => {
+		const position = { x: 70, y: 90 };
+
+		const childNotAllowedBlockData = [ ...blocksData ];
+
+		// Set the first block to not be allowed as a child.
+		childNotAllowedBlockData[ 0 ] = {
+			...childNotAllowedBlockData[ 0 ],
+			canInsertDraggedBlocksAsChild: false,
+		};
+
+		const target = getListViewDropTarget(
+			childNotAllowedBlockData,
+			position
+		);
+
+		expect( target ).toEqual( {
+			blockIndex: 1,
+			clientId: 'block-1',
+			dropPosition: 'bottom',
+			rootClientId: '',
+		} );
+	} );
+
+	it( 'should return undefined when the dragged block cannot be inserted as a sibling', () => {
+		const position = { x: 50, y: 70 };
+
+		const siblingNotAllowedBlockData = [ ...blocksData ];
+
+		// Set the first block to not be allowed as a sibling.
+		siblingNotAllowedBlockData[ 0 ] = {
+			...siblingNotAllowedBlockData[ 0 ],
+			canInsertDraggedBlocksAsSibling: false,
+		};
+
+		const target = getListViewDropTarget(
+			siblingNotAllowedBlockData,
+			position
+		);
+
+		expect( target ).toBeUndefined();
+	} );
+} );
diff --git a/packages/block-editor/src/components/list-view/use-list-view-drop-zone.js b/packages/block-editor/src/components/list-view/use-list-view-drop-zone.js
index c80e03f1fec045..e49a224e44efbe 100644
--- a/packages/block-editor/src/components/list-view/use-list-view-drop-zone.js
+++ b/packages/block-editor/src/components/list-view/use-list-view-drop-zone.js
@@ -36,6 +36,7 @@ import { store as blockEditorStore } from '../../store';
  * @property {Element} element                         The DOM element representing the block.
  * @property {number}  innerBlockCount                 The number of inner blocks the block has.
  * @property {boolean} isDraggedBlock                  Whether the block is currently being dragged.
+ * @property {boolean} isExpanded                      Whether the block is expanded in the UI.
  * @property {boolean} canInsertDraggedBlocksAsSibling Whether the dragged block can be a sibling of this block.
  * @property {boolean} canInsertDraggedBlocksAsChild   Whether the dragged block can be a child of this block.
  */
@@ -78,7 +79,7 @@ const ALLOWED_DROP_EDGES = [ 'top', 'bottom' ];
  *
  * @return {WPListViewDropZoneTarget | undefined} An object containing data about the drop target.
  */
-function getListViewDropTarget( blocksData, position ) {
+export function getListViewDropTarget( blocksData, position ) {
 	let candidateEdge;
 	let candidateBlockData;
 	let candidateDistance;