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As mentioned my @att in the comments, the error is due to the fact that Function does not have the attribute SequenceHold. For workarounds for this issue see the answers here. Some of the workarounds from that question including the one by @att applied to this case are:

As mentioned by @att in the comments, the error is due to the fact that Function does not have the attribute SequenceHold. For workarounds for this issue see the answers here. Some of the workarounds from that question including the one by @att applied to this case are:

Another solution

MapAt[Apply[Sequence], Insert[list1, list2, 3], 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
   0}, {10, -0.4}}  *)

Or without using Insert:

MapAt[Sequence @@ list2~Join~{#} &, list1, 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
  0}, {10, -0.4}} *)

Or

MapAt[Construct[Sequence, Sequence @@ list2, #] &, list1, 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
  0}, {10, -0.4}} *)

MapAt[Sequence[Sequence @@ list2, #] &, list1, 3]

The theme of this answer ended up being : "playing with Sequence and MapAt"

• Using MapAt, Apply, Sequence and Insert:

  MapAt[Apply[Sequence], Insert[list1, list2, 3], 3]
  
  (* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
     0}, {10, -0.4}}  *)
  

• Using MapAt, Sequence, Apply, Join, List and Function (no Insert):

  MapAt[Sequence @@ list2~Join~{#} &, list1, 3]
  
   (* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
    0}, {10, -0.4}} *)
  

• Using MapAt, Construct, Sequence, Apply, and Function (no Insert):

  MapAt[Construct[Sequence, Sequence @@ list2, #] &, list1, 3]
  
   (* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
    0}, {10, -0.4}} *)
  

 MapAt[Sequence[Sequence @@ list2, #] &, list1, 3]

EDIT

As mentioned my @att in the comments, the error is due to the fact that Function does not have the attribute SequenceHold. For workarounds for this issue see the answers here. Some of the workarounds from that question including the one by @att applied to this case are:

• Using MapAt, Sequence (x2), Apply, and Function(x2) (no Insert):

    MapAt[##&[Sequence @@ list2, #] &, list1, 3]
  
   (* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
     0}, {10, -0.4}}  *)
  

• Using MapAt, Sequence (x2), Apply(x2), and Function (no Insert):

   MapAt[Sequence @@ {Sequence @@ list2, #} &, list1, 3]
  
  (* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
    0}, {10, -0.4}} *)
  

Another solution

MapAt[Apply[Sequence], Insert[list1, list2, 3], 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
   0}, {10, -0.4}}  *)

Another solution

MapAt[Apply[Sequence], Insert[list1, list2, 3], 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
   0}, {10, -0.4}}  *)

Or without using Insert:

MapAt[Sequence @@ list2~Join~{#} &, list1, 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
  0}, {10, -0.4}} *)

Or

MapAt[Construct[Sequence, Sequence @@ list2, #] &, list1, 3]

(* {{1, -1.1}, {2, -1}, {2, -0.6}, {3, -0.6}, {3, -0.9}, {4, 
  0}, {10, -0.4}} *)

but

MapAt[Sequence[Sequence @@ list2, #] &, list1, 3]

leads to an error