Created attachment 1212387 [details]
Screen with TERM=xterm

I'm not sure.  There are probably two issues:

1. the red "highlight" color is too shiny with xterm256-color
2. the contrast depends on the actual font color, which depends on file type
and thus syntax colorization plugin .. probably highlighted text should not
use different colors in fonts

Please, either fix 1, or 2, or both -> but the actual colors are unreadable;
and both gnome-terminal and konsole have TERM=xterm256-color by default.

Reproducer for example:
$ vim -d /etc/mock/fedora-rawhide-{x86_64,i386}.cfg