Why does my cat drag towels around the house and howl?

This is the most bizarre behavior, and I didn’t see anything like it on Google. A cat that I recently adopted literally drags towels around the house, stops every few feet, kneads, howls (with towel still in her mouth), and then keeps dragging.

She only does this at night. The towel that she uses is the one that we dried her with after a bath, I don’t know if that’s relevant. Has anyone’s cat acted this way, or performed an analogous behavior? I’m stumped.