The Bug:
Clouds, transparent blocks, entity hitboxes, block outlines, and enchantment glints, render through the inside of banners.
Steps to Reproduce:
Equip some enchanted armor and perfectly position your camera so that it's inside a banner by using the commands provided below.
/execute align xyz run tp @s ~0.5 ~ ~0.5 180 12
/setblock ~ ~ ~-4 minecraft:red_banner
/item replace entity @s armor.chest with minecraft:netherite_chestplate[minecraft:enchantments={levels:{"minecraft:protection":1}}]
Switch into third person.
Wait around three seconds for the banner to move inside of your camera. (This is a result of the banner having natural motion).
Take note as to whether or not clouds, transparent blocks, entity hitboxes, block outlines, and enchantment glints, render through the inside of banners.
Observed Behavior:
Clouds, transparent blocks, entity hitboxes, block outlines, and enchantment glints, render through the inside of banners.
Expected Behavior:
Clouds, transparent blocks, entity hitboxes, block outlines, and enchantment glints, would not render through the inside of banners.
Related issues
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I was able to recreate it. It seems like its any texture that is translucent.
Also, why is there no light gray stained glass pane?

I have attached a video that showcases this error, and attached a screenshot of how it used to look back in 1.14.
Also, why is there no light gray stained glass pane?
There is, it's just practically invisible because the GUI background is the same color. See also MC-36498.

Confirmed in 1.16 Pre-release 8.

In 20w29a.
Can confirm in 20w51a.
Can confirm in 21w03a.
Can confirm in 21w06a.

Confirmed for 21w08b, this even happens on fabolous graphics.
Can confirm in 1.17. I'd like to request ownership of this ticket since the current reporter has been inactive since February 2020. I'm willing to provide all of the necessary information and will keep this report updated.

is not present in snap 14w30a, the first version with banners.
banners are simply invisible once inside.

Also affects block outlines (MC-233704).

Can confirm in 21w40a.

Can confirm in 21w44a.

Can confirm in 1.18 Pre-release 1.

Confirmed in 1.21.4 release candidate 3.