BUG macOS - Big red rectangle next to default cursor

When I select the default (first) cursor from the list after recording, I can see a huge red rectangle next to it, following its movement as well. The rectangle’s size changes according to the cursor’s size. It’s the only cursor that does that, the other ones are just fine:

macOS 14.7.5 (23H527)

Retina 5K, 27-inch, 2019 iMac

3.6 GHz 8-Core Intel Core i9

Radeon Pro 580X 8 GB

128 GB 2667 MHz DDR4