Putting this out here as a solution of sorts; sp-menu along with sp-card (I think), needs to have background color and border manually set/overriden in CSS. Something like this fixes the background missing and/or flashing:
sp-menu,
sp-action-menu {
background-color: var(--uxp-grey);
border: 1px solid var(--uxp-darker-grey);
}
sp-menu-item {
background-color: var(--uxp-grey);
}