fixes #39880

src/vs/workbench/electron-browser/media/shell.css

@@ -124,7 +124,8 @@
 	outline-style: solid;
 }
 
-.monaco-shell .monaco-tree.focused.no-focused-item:focus:before {
+.monaco-shell .monaco-tree.focused.no-focused-item:focus:before,
+.monaco-shell .monaco-list:not(.element-focused):focus:before {
 	position: absolute;
 	top: 0;
 	left: 0;
@@ -157,7 +158,8 @@
 	outline: 0 !important; /* outline is not going well with decoration */
 }
 
-.monaco-shell .monaco-tree.focused:focus {
+.monaco-shell .monaco-tree.focused:focus,
+.monaco-shell .monaco-list:focus {
 	outline: 0 !important; /* tree indicates focus not via outline but through the focused item */
 }
 

src/vs/workbench/electron-browser/shell.ts

@@ -564,18 +564,19 @@ registerThemingParticipant((theme: ITheme, collector: ICssStyleCollector) => {
 	const focusOutline = theme.getColor(focusBorder);
 	if (focusOutline) {
 		collector.addRule(`
-			.monaco-shell [tabindex="0"]:focus,
-			.monaco-shell .synthetic-focus,
-			.monaco-shell select:focus,
-			.monaco-shell .monaco-tree.focused.no-focused-item:focus:before,
-			.monaco-shell input[type="button"]:focus,
-			.monaco-shell input[type="text"]:focus,
-			.monaco-shell button:focus,
-			.monaco-shell textarea:focus,
-			.monaco-shell input[type="search"]:focus,
-			.monaco-shell input[type="checkbox"]:focus {
-				outline-color: ${focusOutline};
-			}
+		.monaco-shell [tabindex="0"]:focus,
+		.monaco-shell .synthetic-focus,
+		.monaco-shell select:focus,
+		.monaco-shell .monaco-tree.focused.no-focused-item:focus:before,
+		.monaco-shell .monaco-list:not(.element-focused):focus:before,
+		.monaco-shell input[type="button"]:focus,
+		.monaco-shell input[type="text"]:focus,
+		.monaco-shell button:focus,
+		.monaco-shell textarea:focus,
+		.monaco-shell input[type="search"]:focus,
+		.monaco-shell input[type="checkbox"]:focus {
+			outline-color: ${focusOutline};
+		}
 		`);
 	}
 });

src/vs/workbench/parts/scm/electron-browser/media/scmViewlet.css

@@ -25,6 +25,7 @@
 
 .scm-viewlet .scm-status {
 	height: 100%;
+	position: relative;
 }
 
 .scm-viewlet .monaco-list-row > .scm-provider {