This is due to be a setting at the operating system level that determines this behavior of the ResizeFcn. The ResizeFcn behaves as expected.
On WinXP, there is a setting under the Display Properties --> Appearance tab --> Effects. In the Effects dialog, there is a checkbox called "Show window contents while dragging". This behavior can be seen on a Windows XP system if the checkbox is checked. When the checkbox is UNchecked (and MATLAB is restarted) this behavior will change to the one expected.
The corresponding setting is on a Windows Vista system would be under the path:
Control Panel\Appearance and Personalization\Personalization
Else, if you Right click on the desktop ---> goto "Personalize" ---> "Window Color and Appearance" --> Effects button.
For Windows 7, please take the following steps:
1) Press [Windows Key]+R
2) Type "systempropertiesadvanced"
3) Click "OK"
4) Under "Performance", click "Settings"
5) Uncheck "Show window contents while dragging"
6) Click "OK"
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