hshi@, what device type and scale factor are you using?

I've never seen this before. Ben, any ideas?

Nuts!! I'm on it.

Re:#4,#5 I'm using an ELM device (1920x1080 IPS screen with default scaling factor of 1.25x -- 1536x1024 logical desktop size)

This is caused by the CL here: https://codereview.chromium.org/2457393006/

The problem is the label's are performing subpixel rendering on a non-opaque background.

re:#6 sorry the IPS panel native resolution is 1920x1280, not 1080

Fix: https://codereview.chromium.org/2468173003/

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/a530e331ccd766b79d133c46cf08c1340f093e33

commit a530e331ccd766b79d133c46cf08c1340f093e33
Author: bruthig <bruthig@chromium.org>
Date: Wed Nov 02 22:29:00 2016

Fixed ugly text in the material design system menu.

Labels have subpixel rendering enabled by default which is ugly when
painted on a non-opaque canvas. Currently any system menu label in
a row with a visible ink drop will be given a clear canvas at paint
time because the ink drop hosting layer is promoted to paint to its
layer. This is a short term fix.

BUG= 661714 

Review-Url: https://codereview.chromium.org/2468173003
Cr-Commit-Position: refs/heads/master@{#429422}

[modify] https://crrev.com/a530e331ccd766b79d133c46cf08c1340f093e33/ash/common/system/chromeos/settings/tray_settings.cc
[modify] https://crrev.com/a530e331ccd766b79d133c46cf08c1340f093e33/ash/common/system/chromeos/tray_caps_lock.cc
[modify] https://crrev.com/a530e331ccd766b79d133c46cf08c1340f093e33/ash/common/system/chromeos/tray_tracing.cc
[modify] https://crrev.com/a530e331ccd766b79d133c46cf08c1340f093e33/ash/common/system/tray/tray_popup_utils.cc
[modify] https://crrev.com/a530e331ccd766b79d133c46cf08c1340f093e33/ash/common/system/update/tray_update.cc

ChromeOS:9000.27.0/Chrome:56.0.2924.26