Created attachment 118023 [details]
This shows the effect explained. But now when I open the same application and cancel the effect by triggering a tooltip in the tray. It only gets cancelled for that application.

SUMMARY
The highlight effect does not end if the highlighted window (Task Manager Settings) is also the active window and is closed.
Or rather the transparency effect of the non-highlighted window(s) persists even thought the highlighted window is closed.
The behaviour also changes with the tooltip setting.  
There are some additional strange behaviours with multiple desktops also connected with highlighting.



STEPS TO REPRODUCE
1. Enable [Highlight Windows] in Task Manager Setting (see related config file below)
2. Also Disable [Show Tooltips]
3. Open two applications, you have two entries on the Task Panel
4. Move/resize the window, that is designated by the leftmost entry on the Task Panel, to occupy the left half of the screen
5. The window designated by the second entry on the Task Panel should occupy the right half.
6. Make sure the right window is active
7. Hover over the second entry on Task Panel, with the mouse cursor. The left window will become transparent.
8. Use a keyboard shortcut to close the active and highlighted (right) window.


OBSERVED RESULT
The left window stays transparent. If you click the application launcher it will also be transparent.
You can click the transparent window and use the application as you normally would but it stays transparent.
In fact it does immediately become active as soon as the right window has closed.

Only once you hover over the Task Panel entry of the window that is still open this effect is canceled.
If you hover over any item on the Panel that is not a part of the Task Panel, the tooltip will also be transparent.
However if you repeat the steps above except at step 2 you Enable [Show Tooltip], hovering over the 
Application Launcher or an item in the System Tray, will also cancel the effect.

EXPECTED RESULT
The transparency effect should end as soon as the highlighted window is closed.




SOFTWARE/OS VERSIONS
Linux/KDE Plasma: 
Operating System: Arch Linux 
KDE Plasma Version: 5.14.5
Qt Version: 5.12.1
KDE Frameworks Version: 5.55.0
Kernel Version: 4.20.7-arch1-1-ARCH
OS Type: 64-bit
Processors: 4 × Intel® Core™ i3-4130 CPU @ 3.40GHz
Memory: 3.5 GiB of RAM

Using plasma-meta package and kwin.

These are the relevant configurations I could find:

[Containments][2][Applets][5]
immutability=1
plugin=org.kde.plasma.taskmanager

[Containments][2][Applets][5][Configuration]
PreloadWeight=0

[Containments][2][Applets][5][Configuration][ConfigDialog]
DialogHeight=980
DialogWidth=1680

[Containments][2][Applets][5][Configuration][General]
groupingStrategy=0
highlightWindows=true
launchers=applications:pycharm.desktop
onlyGroupWhenFull=false
showOnlyCurrentActivity=false
showOnlyCurrentDesktop=true
showToolTips=false
sortingStrategy=0




ADDITIONAL INFORMATION

The steps above are the simplest and clearest setup to reproduce. The size and positioning of the window doesn't matter. The point of doing it in this specific way is, if you would close the left window, the Task Panel entry on the right would shift to the left (under the mouse cursor) and the effect would be cancelled immediately and probably not be noticed.
This effect happens with any number of open windows, grouped windows. 
It expands over all Virtual Desktops. I.e. if you switch to another Desktop the windows there will also be transparent.
It happens whether the [Show Only Tasks from the current desktop] is Enabled or Disabled.
If you do the steps above except
at step 2: enable [Show Tooltip], set Grouping to [By Program Name], enable [Open Groups in popups], disable [Only group when the Task Manager is full]
at step 3: Open the same program twice (two windows).
at step 7: hover over the Task Panel entry until the popup with two previews appears and move the mouse cursor to the rightmost preview.
You get the same result. (make sure the left preview doesn't shift under the cursor once the right preview disappears.

Another related issue is that with multiple virtual desktops, highlighting enabled.
Hovering over an item on the task panel and then switching to another desktop (left,right,up,down), will actually move that window to that desktop, but only in appearance. 

Two final notes (Since it's are Task Manager Settings related:
If I select Grouping [By program name] but disable its suboption [Open groups in popups],
no grouping happens at all.

It seems to me that Disabling [Show Tooltips] should automagically disable or grey out [Open groups in popups]

THe following album on google photos contains a couple more videos that show what was discussed.
https://photos.app.goo.gl/UoqvRR6KMv9oMRTt8