I had this happen yesterday. Worked ok after I went to something else for awhile
What I was doing at the time:-
Made a favicon, resized it to 5px so as it didn't get in the way. Decided to change text colour and bg colour so resized up and altered. When I went to resize down again I got that 4-way arrow and it wouldn't do anything on the corners but the normal cursor was there for top & sides.
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