Unable to turn off Blue Outline around random button that keeps showing up on Mac Studio with macOS Sonoma.

I've noticed this issue the past few weeks on my M1 Mac Studio. The strange thing is... this issue doesn't happen at all on my older iMac (late 2019, Intel-based). I'm running same Mac OS version (14.3) on both machines. I'm attaching screenshots for how this looks.

I contacted Apple Support earlier today, and he suggested that I completely reinstall MacOS (!!!) which seems like a major & time-consuming measure to fix this. I figured there was some weird Accessibility "feature" that accidentally got turned on somehow that puts an ugly blue shadow around everything, but I don't know. Has anyone been encountering this? Any fixes?

[Re-Titled by Moderator]