Erm, that's not a bug. That's been in Glest in forever. The term you're looking for is "selection circle". It's completely dependent on the size value of the unit. Since it has to be a circle and will always have a diameter of the unit's size, it may appear to "overlap" at larger sizes. I don't see you proposing any alternative, though, and it's crucial that it's easy to know when we've selected units. I suppose it could be possible to implement something similar to
this, which was meant to show team colour, but could be adapted for selection. However, the selection circles also show the unit's health (if rather loosely) and better represent the unit's size (the diameter of the circle will always be the exact number of cells the unit's size is, although the unit size is actually a square, while the selection circle is, well, a circle).