Factorio Forums

When dragging a belt over a ghost, if one comes upon an underground belt, the smart belt dragging utility automatically places the undeground belts. If the player has no underground belts in their inventory, then a belt is placed where the starting underground ghost was, deleting it, but does not delete the ending underground belt.

The image outlines what happens when dragging the belt from left-to-right. When dragging from right-to-left, the rightmost underground belt ghost is deleted instead.
Edit: The expected behaviour is for the belt adjacent to the chest to not be placed, and for the ghost underground to remain.