@JonaO703Thanks so much for checking that for me. It's looking like an Xbox or Xbox Series X issue. EASolaire is assisting me on the the technical issues thread. I tested it on other items too and ironically I could place a games console on seating but not the throw pillows, they just snap to the floor. I had a response on the technical issues thread from a PS5 player too who said it works for her too and since it works on PC that narrows it down to Xbox by the look of it...or just me... maybe... hopefully not... nothing would surprise me 😕.
It would have to happen to the world's biggest throw pillow fan.
Edit: after another few hours of testing I attach a few images (here and on the tech issues report) of well behaved soft toys sitting on furniture exactly where I placed them and the throw pillows doing the exact opposite. I came up with a decorative solution that I'm happy with though by mimicking the Desert Luxe seating and end tables by using platforms to make what I am now calling "faux seating" 😁.
Just to update on this placement issue we got there eventually and it helps to remove the sofa and place the throw pillows with MOO then click them up to the right height then put the sofa back and place the pillows with free placement. That's for anyone having the same issue. Same as the workaround for the curtain/pole placement where it works better if you add them before placing the window.