1. Install Optifabric 1.8.13, Optifine 1.16.2 HD U G5, Euclid 1.1 and Worldedit 1.16.3 7.2.0-beta-05+20beda4
2. Enable a shader (I use Sildurs Vibrant Shaders v1.27 Lite)
3. Load any creative mode world
4. get an item and type //selwand
5. left click any blocks and you can't see green border on the block

If turn off shader, it's fine

Confirmed for OptiFabric 1.8.16 with OptiFine 1.16.5 HD U G6

Doesn't World Edit have a Forge version too? Might be worth trying with that and OptiFine and see if it happens to work any better.

The reason I suggest it is because the missing outline seems to suspiciously correlate with an issue Litematica has where it won't renderer the outlines of it's areas (when you fix the wacky triangle thing it does with shaders turned on). World Edit seems to create its outlines by sending fake structure blocks to the client, but real structure blocks do render their outline...

You can use WorldEditCUI instead of Euclid. As far as I know, it is compatible with OptiFine shaders.