I like to help, but sometimes I don't understand what is wanted. Usually that's my fault.
Do you want the KM macro palette to appear when you select text? Or when you've dropped it? Or somewhere in between?
Here's another question. If you want the palette to disappear when the drag option is over, how do you expect to click on anything in the palette? The moment you try to click on it it will have disappeared because you have to let go of the mouse, which will end the drag operation.
I have a different possible solution for you. Instead of having the palette disappear during a drag operation, why not have it appear when you press a key? I've tested that, it even works during a drag operation.
I agree with you that that's probably what the fellow wants. It's not a bad idea or product. I kinda like it and I agree it would be a nice thing to have via KM.
However I would point out that macOS already supports this with the Services menu available in all applications. But it doesn't use a palette, it uses a menu, which is slightly less pretty. I think I've created some services using Automator.
cool to see you using poplcip
what I think is you can use the same shortcut for many actions, that way when using the shortcut, it'll trigger a macro window with all the actions using that shortcut, from there you can select the one you want to run.
also, Dropzone app can be helpful too, and/or Hazel