Many of the highlighting differences between notebooks and python files have been reconciled in the Nov release 1.96, but I don't think this is one.

Editor settings (for dramatic effect):
"workbench.colorCustomizations": {
"editor.selectionBackground": "#f00",
"editor.selectionHighlightBackground": "#afb47f80",
"editor.selectionHighlightBorder": "#ffffff91",
}

Python file:

Notebook file:

The python file highlight aligns with expectations but the notebook doesn't.

Originally posted by @Wmuntean in #200406

• VS Code Version: 1.96