Code

void DiagramMouseMove(object sender, MouseEventArgs e)
{
	if (dummyNode != null)
	{
		Rect bounds = parentNode.Bounds;

		if (!bounds.Contains(e.GetPosition(diagram)))
		{
			diagram.Nodes.Remove(dummyNode);
			dummyNode = null;
			parentNode = null;
		}
	}
	else
	{
		DiagramNode node = diagram.GetNodeAt(e.GetPosition(diagram));

		if (node != null && node is ShapeNode)
		{
			parentNode = node as ShapeNode;
			dummyNode = (ShapeNode)parentNode.Clone(false);

			Rect newBounds = dummyNode.Bounds;
			newBounds.Inflate(20, 20);
			dummyNode.Bounds = newBounds;
			dummyNode.Text = "dummy";

			diagram.Nodes.Add(dummyNode);
		}
	}
}