Dragging the frame by dragging the border shouldn't have happened in the
first place. Please try again with:
(custom-set-faces
'(internal-border ((t (:background "red")))))
(defun open-test (buffer)
(display-buffer-in-child-frame
buffer '((child-frame-parameters
. ((width . 40)
(height . 10)
(top . 50)
(left . 50)
(minibuffer . nil)
(border-width . 0)
(internal-border-width . 10)
(drag-internal-border . t)
(drag-with-mode-line . t)
)))))
(setq-local test-buffer (get-buffer-create "*test child-frame*"))
(setq-local test-frame (window-frame (open-test test-buffer)))