Able to reproduce the issue on Mac 10.12.6 using chrome latest Canary-62.0.3168.0.
Manual bisect info:
------------------
Good Build: 60.0.3090.0-Revision-469538
Bad Build: 60.0.3093.0-Revision-469894

Bisect tool info: (Unable to run bisect with new script for the above range hence provided bisect with old script)
------------------
You are probably looking for a change made after 469803 (known good), but no later than 469824 (first known bad).
CHANGELOG URL:
https://chromium.googlesource.com/chromium/src/+log/58af3bbef01008fd3af4481892e19c5da5bc2d74..c8faec73855c122f94f00c54549ee6542da59e9b

Possible suspect:
----------------
https://chromium.googlesource.com/chromium/src/+/ec11daa13a86c2535a123ea45e91e5b82d4d7d1e

varkha@,Could you please take a look and reassign to the right owner if it is not related to your change.
Thanks..!!

Draft at https://chromium-review.googlesource.com/c/590498/ . Targeting M-62.
I would argue against fixing this in M-60 or M-61 at this point - the fix there would probably be different, possibly avoiding a call to KeepBubbleAnchored in ChooserBubbleUi::CreateAndShow when the browser is fullscreen should do it.

Passing to tapted@ since we want a fix earlier and the cocoa path shouldn't be using ChooserBubbleUi::CreateAndShow. https://chromium-review.googlesource.com/c/590498/ would work eventually but there are concerns about VoiceOver in TableView used by the toolkit-views version of the ChooserBubble.

https://chromium-review.googlesource.com/593368

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/debb20bc74b633b996516e2b5859da40e2e82440

commit debb20bc74b633b996516e2b5859da40e2e82440
Author: Trent Apted <tapted@chromium.org>
Date: Tue Aug 01 02:53:33 2017

Fix positioning of the Cocoa device chooser.

This regressed in r469822, which corrected the way a class of bubbles
detect whether the browser is fullscreen. Unfortunately, this particular
bubble does not anchor properly on Mac when fullscreen was detected.

The bubble should always anchor top-left (leading) so that it doesn't
obscure the fullscreen bubble.

Bug:  749410 ,  745291 
Test: At https://permission.site, click Fullscreen, then USB. The dialog
      should appear on-screen.

Change-Id: Ieeca54305f0884cd9fe6ec3e7b1611332df08499
Reviewed-on: https://chromium-review.googlesource.com/593368
Reviewed-by: Giovanni Ortuño Urquidi <ortuno@chromium.org>
Commit-Queue: Trent Apted <tapted@chromium.org>
Cr-Commit-Position: refs/heads/master@{#490841}
[modify] https://crrev.com/debb20bc74b633b996516e2b5859da40e2e82440/chrome/browser/ui/cocoa/permission_bubble/chooser_bubble_ui_cocoa.mm

Just to update: 
Above issue is fixed on latest Canary version: 62.0.3174.0 (Official Build) on Mac OS

Thanks you.

Deleted: Issue_Actual.mov 4.2 MB

Issue_Actual.mov 4.2 MB Download

Requesting merge to m61 for r490841 (this affects m60 as well, but usage should still be low there)

Your change meets the bar and is auto-approved for M61. Please go ahead and merge the CL to branch 3163 manually. Please contact milestone owner if you have questions.
Owners: amineer@(Android), cmasso@(iOS), ketakid @(ChromeOS), govind@(Desktop)

For more details visit https://www.chromium.org/issue-tracking/autotriage - Your friendly Sheriffbot

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/73ecf0129d044a4e1137afbbb9c3fab6294edbd2

commit 73ecf0129d044a4e1137afbbb9c3fab6294edbd2
Author: Trent Apted <tapted@chromium.org>
Date: Fri Aug 04 02:50:03 2017

[merge-m60] Fix positioning of the Cocoa device chooser.

This regressed in r469822, which corrected the way a class of bubbles
detect whether the browser is fullscreen. Unfortunately, this particular
bubble does not anchor properly on Mac when fullscreen was detected.

The bubble should always anchor top-left (leading) so that it doesn't
obscure the fullscreen bubble.

Bug:  749410 ,  745291 
Test: At https://permission.site, click Fullscreen, then USB. The dialog
      should appear on-screen.

TBR=tapted@chromium.org

(cherry picked from commit debb20bc74b633b996516e2b5859da40e2e82440)

Change-Id: Ieeca54305f0884cd9fe6ec3e7b1611332df08499
Reviewed-on: https://chromium-review.googlesource.com/593368
Reviewed-by: Giovanni Ortuño Urquidi <ortuno@chromium.org>
Commit-Queue: Trent Apted <tapted@chromium.org>
Cr-Original-Commit-Position: refs/heads/master@{#490841}
Reviewed-on: https://chromium-review.googlesource.com/601629
Reviewed-by: Trent Apted <tapted@chromium.org>
Cr-Commit-Position: refs/branch-heads/3163@{#305}
Cr-Branched-From: ff259bab28b35d242e10186cd63af7ed404fae0d-refs/heads/master@{#488528}
[modify] https://crrev.com/73ecf0129d044a4e1137afbbb9c3fab6294edbd2/chrome/browser/ui/cocoa/permission_bubble/chooser_bubble_ui_cocoa.mm

Rechecked this issue on MAC 10.12.6 using chrome version 61.0.3163.39, merge is working as intended. Overlay is displayed fine. Screen shot attached. Adding TE-verified labels.

Thanks.!

Deleted: Overlay - Full screen.png 499 KB

	Overlay - Full screen.png 499 KB View Download