App Theme Block using fixed positioning does not render correctly unless 'reveal sections on scroll' is turned off

[MARCA-Charlie]

Describe the current behavior

Mounting an app block using fixed positioning causes the fixed element to display relative to the app block's section html element and seems to not respect z-index and various other CSS properties.

Describe the expected behavior

The fixed element rendered by the app block should ignore the document flow and not be contained by the HTML element that corresponds to the app block section.

When disabling the 'reveal sections on scroll' setting, the app block elements work as expected.

Version information (Dawn, browsers and operating systems)

• Dawn Version: 7.0.1
• Chrome Version 108.0.5359.124
• macOS Version 13.1

Possible solution

Additional context/screenshots

Code for app block

{%- render 'upsell_popup_styles' -%}
<script src="{{  'upsell_popup_script.js' |  asset_url}}"  ></script>

<div class="marca_atc_modal__backdrop marca_atc_modal__container-display-none" id="marca_atc_modal__container-id">
    <div class="marca_atc_modal__modal-container">
        {% render 'upsell_popup_product_card' %}
    </div>
</div>

<style>

    .marca_atc_modal__container-display-none {
        display: none;
    }

    .marca_atc_modal__backdrop {
        width: 100vw;
        height: 100vh;
        position: fixed!important; 
        top: 0;
        left: 0;
        background-color: rgba(0,0,0,0.5);
        padding: 100px;
        z-index: 1000;
    }

    
    .marca_atc_modal__modal-container {
        background-color: white;
        border-radius: 5px;
        padding: 10px;
        box-shadow: 0px 0px 5px 0px rgba(0,0,0,0.75);
        position: absolute!important;
        z-index: 1001;
        top: 50%;
        left: 50%;
        transform: translate(-50%, -50%);
        height: 70%;
        width: 70%;
    }

   ...

</style>


{% schema %}
    {
      "name": "Upsell Popup",
      "target": "section"
      
    }
{% endschema %}

Video:
https://github.com/Shopify/dawn/assets/89167030/969ffc4a-6bf3-4b35-946b-f1cc26756709

[MARCA-Charlie]

@JoshATM

[TheGreatSimo]

Same issue here