The current behaviour makes sense if you think of what it's doing in Position-order mode:

Suppose you press CTRL-UP. Then item n is swapped with item (n-1) and these two items are swapped in the display - without moving them. Er, it's quite hard to describe!

Try it a few times, looking at the Position field. The selected item will be swapped with the item that has position=n-1. This is obviously the Right Thing when the items are in Position order, but it looks weird otherwise...

Do I get the cookie? Or is that too poor an explanation?