The cursor is (and I think should be) drawn on the element it's targeting. In this case the cursor is targeting the background, and it's drawn on the background.

We don't want the cursor to ignore depth buffer, or it's going to bizarrely cut into elements it's behind (and the transparency of the cursor shadow wouldn't even make sense at that point).

We don't want the cursor hitbox to be like a square that encloses the circular reticle, because that causes many problems, like targeting multiple depths/elements at once, moving onto an element before the element is targeted, the cursor depth changing before it's visually on an elements, etc.