I would still have a look around in Settings > Accessibility > Touch > Assistive Touch and see if there is anything amiss. What you’re describing is called a “focus indicator”, you would also see something similar if you were to use a keyboard and use the Tab key to switch UI input elements (buttons, text boxes, tabs, etc.) - the focus indicator goes from element to element each time you press the tab key.
@420benz I think I found it. Go into Settings > Accessibility and see if Switch Control is turned on. If so, turn it off. This should turn off the outline.
@420benz I think I found it. Go into Settings > Accessibility and see if Switch Control is turned on. If so, turn it off. This should turn off the outline.