Affects both singleplayer and multiplayer menu. Closing out and going back in the screen resets it.
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This issue was present in 1.19.3 but no longer occurs in 23w03a. This issue has been fixed in 23w03a.
Just tested in 1.19.4, the outline is now completely white no matter what. Should I make a new report or is that not the result for you?
Can confirm in 20w51a.