Dynamic Blur makes shape shift not work

[Thesola10]

Rounded corners do not work when Dynamic Blur is chosen as background effect, leading to it showing as rectangular.

The border, however, is the right shape somehow:

[neuromorph]

Hello,
Yes, unfortunately rounded corners do not work with the way Gnome shell blur is implemented. As I remember, the shell function just takes the rectangle corners as allocation for the actor (widget) to blur. There is no clean/direct way to fix it here so hoping Gnome will implement some update to shell blur.
This is noted in ReadMe here.
Blur My Shell extension also faces this issue and is being tracked here in case you want to have a look.
I will keep it open here to track any updates or potential hacks to improve it at some point.

Note: My current hack is to use only a small radius and hide sharp corners behind the border.

Thank you for writing!