Able to reproduce the issue on Ubuntu 14.04 using chrome latest stable M51-51.0.2704.84. Observed extra block around the radius while dragging the element.

This is a non-regression issue seen from past M35-35.0.1916.150, Hence marking it as untriaged.

Note: All other OS platform is working fine as expected.

Who was working on DragImage recently?

Both Tien-Ren and I recently worked in this area. This is not trivial to fix though.

I can't reproduce this on stable, dev or canary on a Retina Mac. Neither can Stephen.
pdr can you repro? Regardless, the possible cause of the bug is the change in how we 
paint from the enclosing stacking context; we should probably WontFix this bug if so.

I could reproduce on ubuntu, but now I'm on my mac and cannot reproduce it.

Assigning to myself to figure out why there's a discrepancy. It should be possible to achieve this effect somehow (maybe a transparent background on the body?).

This reminds me of issue 575097. There I theorize that this is because of how the (native) platform window is setup, possibly in combination with DE specifics. The background-color on the Blink-level likely has nothing to do with it.

Thanks fs, the linux part of this is indeed 575097.