Since the V7 viewer was introduced there is a major issue with highlighting transparent faces which often renders it completely useless. If there are alpha blended and alpha masked surfaces in the same scene, once an alpha mask highlight happens to be behind an alpha blend highlight, it doesn't render behind the alpha blend highlight.

See the screenshots below.

First highlight transparent (Ctrl+Alt+T).

Rez a cube and set the default transparent texture on it or change its transparency to 100%.

Then rez a second cube, set the default transparent texture on it, switch alpha mode to alpha masking and set mask cutoff to 100%.

Then place the alpha mask cube behind the alpha blend cube and move your camera view so that the alpha blend cube will be in front of the alpha mask cube. The blue highlight will vanish behind the red highlight.

Also see the expected behavior screenshots from a V6 viewer. This used to work like this forever before V7 viewers and it is crucial for particular workflows.

In a large scene where you have alpha blended and alpha masked faces and you need to make sure invisible parts of these objects are not reaching over borders or places where they shouldn't, the alpha blend highlights will cover any alpha mask highlight under or behind them. Now instead of seeing the entire scene when highlighting transparent, we need to turn off alpha blend highlights to check for alpha mask highlights. It breaks this workflow completely and makes it complicated, it also takes a lot more time to check a scene.

Another example that is very important is that vehicles have alpha blended windshields. If you need to highlight transparent while in a vehicle because you hit an invisible obstacle, with the current behavior you can't see the alpha mask highlights at all, again unless you turn off the alpha blend highlight. And then you need to check for the two kinds of surfaces separately while you are supposed to be traveling.

Another issue is that the red highlight of the alpha blended faces is extremely bright and also more transparent than it used to be (difference visible in the screenshots), so it is very difficult now to work with alpha blended textures on objects without getting a headache, and the edges where the texture is too transparent cannot be seen properly. I can't see the reason behind this, there is no benefit of making the red highlight so bright. I assume the transparency of the texture is simply the result of the new rendering system, but then the texture should have been remade to look like it used to be before V7.

Please restore the full functionality of the alpha highlight system to how it used to be before V7.