This setting has been toggled off a few days ago already.
It will probably not update itself on a package update, cuz the setting resides in some Plasma config file on user’s $HOME, but if you compare the files from /etc/skel the change has been made, so yes it reproduced in the ISO, in fact latest ISO has this fixed.
The change also toggles OFF Blur Menus as the same problem was happening with the menus and right-click dialog menus.