bug#50337:

[Fejfighter]

Having looked at this, the variable is respected, it's largely the same code as the x version.

if the cursor colour and the foreground face are different it will show up

The actual error is that the colour selected to draw was the foreground face rather than the background used. this patch should correct it

0001-Set-correct-face-color-for-stretched-glyphs.patch
Description: Text Data