Glitch in Convert to Shape > Rounded Rectangle effect
When applying Convert to Shape > Rounded Rectangle effect to an object, and applying a corner radius larger than the shape can support, one side of the rounded rectangle is given an extra anchor point with adjustment handles that make an overlap visible. This only occurs on one side of the object.
The desired result is that the corners meet at a single anchor point, as on the right hand side of the objects in the attached AI file.
Illustrator v 27.5, Windows 11
You can workaround this by adding the Add effect next.
It does not mean it’s OK though.
Doug Roberts commented
Attaching an AI file here because I can't attach it to the main post for some reason.