Switch 2 Beta vibrant visuals transparency effect rendering bug

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Object transparency effect has bug on Vibrant Visuals video setting.

Version: (Switch 2 Closed Beta) beta 26.60.24

Steps to reproduce:

1. Set video setting to Vibrant Visuals

2. Walk close to Kelp, Sugar Cane, or any block/entity that triggers the effect when you get too close.

Actual (bugged) result is in the attached image.

Description isn't working for me so I pasted it in the comments.

Do you have disabled the block dithering and entity dithering in accessibility settings?

No, I found the bug with it enabled, but disabling it does remove the issue, but it removes the dithering all together.

Thanks for reminding me, I added it to the instruction list.