Description of problem:
On systems with patched kernels running grub2-mkconfig causes the system to boot the base kernel.  i.e. instead of 3.10.0-128.8.1.el7 it boots 3.10.0-128.el7.

Version-Release number of selected component (if applicable):
grub2-tools-2.02-0.2.10.el7

How reproducible:
100%

Steps to Reproduce:
1. RHEL 7 system patched with a non-base kernel (8.1.el7)
2. run grub2-mkconfig -o /boot/grub2/grub.cfg
3. as config is built look at order
4. reboot
5. watch base kernel boot

Actual results:
boots older base kernel, ignores grub2-editenv list/grub2-set-default.

Expected results:
boots patched kernel, or selected kernel in grub2-editenv list/grub2-set-default.

Additional info:
It appears that RHEL7 is using the wrong selector for setting the grub2-set-default.  It could potentially be "working as intended" and then this bug would be related to the %post script in kernel patches.  Though documentation all specifies menuentry as the selector.

[root@localhost ~]# grub2-editenv list
saved_entry=Red Hat Enterprise Linux Server (3.10.0-123.8.1.el7.x86_64) 7.0 (Maipo)
[root@localhost ~]# uname -r
3.10.0-123.el7.x86_64

The selection appears to be based on the text following $menuentry_id_option in grub.cfg, listed by the following.

[root@localhost ~]# grep "^menuentry" /boot/grub2/grub.cfg | cut -d "'" -f4
gnulinux-3.10.0-123.el7.x86_64-advanced-3de2aca4-9fdd-42fd-9480-420d59b19a76
gnulinux-3.10.0-123.8.1.el7.x86_64-advanced-3de2aca4-9fdd-42fd-9480-420d59b19a76
gnulinux-0-rescue-b4d7fa385e6d4bd08a804d2082ef14d4-advanced-3de2aca4-9fdd-42fd-9480-420d59b19a76

in this case I run the following to preserve the patched kernel to survive grub2-mkconfig

[root@localhost ~]# grub2-set-default gnulinux-3.10.0-123.8.1.el7.x86_64-advanced-3de2aca4-9fdd-42fd-9480-420d59b19a76
[root@localhost ~]# grub2-editenv list
saved_entry=gnulinux-3.10.0-123.8.1.el7.x86_64-advanced-3de2aca4-9fdd-42fd-9480-420d59b19a76
[root@localhost ~]# grub2-mkconfig -o /boot/grub2/grub.cfg 
Generating grub configuration file ...
Found linux image: /boot/vmlinuz-3.10.0-123.el7.x86_64
Found initrd image: /boot/initramfs-3.10.0-123.el7.x86_64.img
Found linux image: /boot/vmlinuz-3.10.0-123.8.1.el7.x86_64
Found initrd image: /boot/initramfs-3.10.0-123.8.1.el7.x86_64.img
Found linux image: /boot/vmlinuz-0-rescue-b4d7fa385e6d4bd08a804d2082ef14d4
Found initrd image: /boot/initramfs-0-rescue-b4d7fa385e6d4bd08a804d2082ef14d4.img

now after a reboot I get the following.

[root@localhost ~]# grub2-editenv list
saved_entry=gnulinux-3.10.0-123.8.1.el7.x86_64-advanced-3de2aca4-9fdd-42fd-9480-420d59b19a76
[root@localhost ~]# uname -r
3.10.0-123.8.1.el7.x86_64