Thanks for filing the issue!

Checked the issue on Reported chrome version 64.0.3282.140 and on the latest canary 66.0.3342.0 using Windows 10 with the below mentioned steps.
1. Launched Chrome
2. Navigated to https://jsfiddle.net/8wpe5Lda/3/
3. Hovered over the div block couple of times 
4. Then hovered under the div block 
Observed Text items appeared even when hovered under the Dev. Attaching the screenshot of the same.

@Reporter: Could you please let us know if we have missed any steps while reproducing the issue. It would be highly helpful if shared with a screen cast/screenshot explaining the issue.

Thanks!

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There are my screen cast.
#1 Original issue
#2 Addition:
Also if you try to uncheck "visibility: visible" attribute, with parent <div> on hover through dev panel it will stuck for 3s (I have changed child <li> transition duration for this video) and only after this goes invisible.

visibility: visible"

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Thank you for providing more feedback. Adding requester "vamshi.kommuri@techmahindra.com" to the cc list and removing "Needs-Feedback" label.

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

Able to reproduce this issue on reported version 64.0.3282.140, on latest beta 65.0.3325.51 and on latest canary 66.0.3344.0 using Windows 10,Mac 10.13.3 and Ubuntu 14.04 with JSFiddle given in comment#0.

Observations:

1. In chrome from M60, on hovering on hover on me button, removing and again hovering under button opens list.
2. In Firefox on hovering on button, removing and then hovering under button doesn't open any list. Attaching screencast of M60,M66 and Firefox behaviors. 

As this issue is seen from M-60, considering this issue as Non-Regression and marking as Untriaged and removing Needs-Bisect label.

Thanks!

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I know that Firefox is behaving as what would intuitively be expected, but I think according to the standard Chrome's behavior is accurate. 

The second green box at https://drafts.csswg.org/css-transitions/#starting describes a situation similar to this one. Shortly, it says that the child's transition overrides the parent's. To test, I have added some logging to the interpolation and transition codes and observed that currently, indeed the child's transition continues (bcs it is longer in duration). The reason of the observed strange behavior is because :hover selector works on elements with opacity: 0. So, while the list items' transition to hidden visibility is still continuing, they disappear just because of the parent's opacity being 0, but as normally, :hover still works on them since they still have visibility: visible. Hence, hovering on them makes the hover-box visible, just as it should.

Long story short, even though the current behavior is different from other browser(s) and is counter-intuitive, I think this is not a bug.

 Issue 878715  has been merged into this issue.

This seems to be fixed in the current stable release (71.0.3578.98). The behavior on Chrome and Firefox look identical to me.

However,  issue 878715 , which was marked as a duplicate, is not fixed.