Described behavior is intentional, happy to further refine it. Explaining logic below:

If the user holds down the button and moves, the toggle will move only if a move of at least 4px is detected. See [1]. This means that if less than 4px is detected we consider that the user changed their mind and don't want to toggle.

[1] https://cs.chromium.org/chromium/src/ui/webui/resources/cr_elements/cr_toggle/cr_toggle.js?l=71.

I should add. If the user moves the direction towards the "wrong" direction, meaning the direction where the toggle is already at, we don't change the state. We initially did, and it felt fairly strange. Current behavior AFAIK also matches what paper-toggle-button did.

Sorry, but I'm seeing something different.

Please consider checking paper-toggle-button. Empirically it is doing the opposite behavior for me.

The paper-toggle-button behavior appears to be: If the end point is near the start point it's considered a stationary click. If it strays too far from the start point it's considered a change of mind.

Per offline discussion with @dschuyler, I'll upload a CL that modifies the behavior to cause a mousemove+release to still toggle the state, if the move is very small, and we can try it locally and decide if we want this.

FYI the CL is ready at https://chromium-review.googlesource.com/c/chromium/src/+/714196.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/65d5f3e8870705a70bea699328945e309bde6965

commit 65d5f3e8870705a70bea699328945e309bde6965
Author: dpapad <dpapad@chromium.org>
Date: Fri Oct 13 21:48:00 2017

WebUI cr-toggle: Account for accidental pointermove (shaky hands) gesture.

Tweak the logic that decides when a pointermove is considered intentional, to
allow for a 5px accidental move.

The following sequence now toggles the state, whereas before it did not.
pointerdown -> pointermove in any direction by 4 or less px -> pointerup

Bug:  773517 
Cq-Include-Trybots: master.tryserver.chromium.linux:closure_compilation
Change-Id: I54b5364b7e82b5c24852699cdf7061893b63c0fa
Reviewed-on: https://chromium-review.googlesource.com/714196
Reviewed-by: Dave Schuyler <dschuyler@chromium.org>
Commit-Queue: Demetrios Papadopoulos <dpapad@chromium.org>
Cr-Commit-Position: refs/heads/master@{#508829}
[modify] https://crrev.com/65d5f3e8870705a70bea699328945e309bde6965/chrome/test/data/webui/cr_elements/cr_toggle_test.js
[modify] https://crrev.com/65d5f3e8870705a70bea699328945e309bde6965/ui/webui/resources/cr_elements/cr_toggle/cr_toggle.js