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Thank you for the submission, but I do not think showing different popovers even more differently is the right way to fix the issue.

#47471 (comment) describes a more viable (IMO) approach.

I see. I only have two concerns about #47471 (comment).

One, IMO, showing the popover near the line of hover, instead of the first line, is closer to what the user would expect. If a user hovers at line 10, their eyes are most likely staring at line 10. However, hovering at line 10 then moving my eyes multiple lines up (or even worse, needing to scroll up) just to see the error message might not, IMO, be the best UX. Let me know your thoughts, @SomeoneToIgnore, I might be missing something.

Two, how would we address: #47471 (comment) and #47471 (comment)?

That being said, if you are concerned that showing different popovers differently is not viable, we can keep all popover right-aligned (the original behavior). My point is to keep the popover near the line of hover instead of the start of the range for multiline diagnostics.

I would propose not to mix things together, to increase the chances those are understood and merged.

One

Seems reasonable, but please be mindful there could be situations like

where multiple various popovers may be displayed at once (there could be more than the screenshot shows: at least there are assistant predictions and signature help popovers that are not shown here)

This on its own is not a simple task to deal with, and maybe better to be improved one step at a time.
I am not 100% certain that the hover popover has to always appear just to the right of the caret, as completions are much more important and it would be so much more confusing to push them away somewhere.

Two

I may not understand that in the context of the issue: the popovers get too far away from the caret and get hidden.
By introducing the timeout, we're supposed to allow the cursor to hover the popovers without them disappearing.

Given that the 2nd point "echoes" the first, and the first mentions that large popovers cover the entire screen, it's not 100% related to the issue?
We have ESC to hide these.

Overall, as you can see, I can mostly handwave and show which path we do consider right and which ones we do not.

The contribution itself is not writing the code, LLMs can do that already, but to understand what to do, so I highly hope I am not forced to guide every step here: there are other editors which support hover popovers: VSCode, Intellij IDEs, etc. etc. — checking what they do in a similar situation is a so much better step forward compared to questioning the same questions for the 2nd time within a week.