Note the circle before it intersects with the rect, without accounting for pixels beyond the bounds, the blur is incorrect because the kernel doesn’t take into effect the circle.
Note the blur after extending the kernel beyond the visible bounds. While the blur is correct, the albedo of the shape passing through the rect no longer makes sense. The circle is not emissive, and yet despite this, you see the blur of the circle behind the rectangle without it intersecting in a full-bright environment. Why can we assume the environment is full-bright? Because there is no lighting. Only albedo.
Neither are correct.
It's too exaggerated for, say, a kernel of 32px.
It’s not impossible that this will be adjusted in the future in some way, like how browsers quite some years ago shifted to premultiplying colours so that a gradient from white to transparent doesn’t go through semitransparent grey, but browsers are acting according to spec.
I instead assume that materials are by default more similar to paper.