Mostly just taken from #7516 (review)

The selected item should stay highlighted for consistency with the list selection changes.

The bottom edge should get the same border radius as the top one. As a result, the blue line indicating highlight should be rounded and less wide.

The active item changing to be bold is quite distracting to me. I feel like we could drop that behavior as we don't do it everywhere for selection either way.

A nitpick:
When hovering, this thing that happens because of the border radius looks weird:

There should be at least a 2px gap here to avoid this. The container itself could also be more rounded.

Here is how it should look like with these changes:

It would also be cool if the blue line could do a little animation, growing in width when selected instead of just suddenly appearing, like so: