Outline rendering is not defined by css specs, so browsers are free to improvise.
outline: auto rendering has historically been exceptionally incompatible between browsers.
Throw in pseudo-elements, and all bets are off.

csswg has been thinking about making stronger outline rendering recommendations.
csswg working on outline, css-ui-3, would probably love getting developer input on outline use, and why you need interoperability between browsers.

Thanks for the response. I opened an issue with csswg-drafts in hopes they'll make the spec clearer: https://github.com/w3c/csswg-drafts/issues/3539.

I do, however, think that Chrome's behaviour is especially odd. Though different in behaviour, the other browsers are consistent when it comes to the pseudo elements. Chrome is the only browsers that works one way 90% of the time, and differently in unique circumstances.

Also, for what it's worth, I think Safari has it right on this one. Pseudo elements and descendants outside of the elements box model shouldn't be highlighted.