Resolution: Works As Intended
The glowing effect used to render around translucent pixels in textures, however this is no longer the case. This issue is likely a bug because this same bug has been fixed in the past (see 1.14 (correct) vs 19w39a (incorrect, same issue as now) vs 1.15/1.16 (correct) glowing effect).
This is could be because translucent alpha becomes opaque once it reaches the glowing shader rather than retaining partial transparency information as it always had before. The attached images compare 1.16.5 to 21w10a including checking the alpha values directly to confirm that partial transparency is not being rendered successfully.
Possibly worth nothing that the new transparency shader buffers (like itemEntity, translucent, etc.) now seem to render differently/incorrectly and have a blue background (see
MC-218990) not sure if related or not.
1. Summon a glowing translucent entity
2. Notice that the translucent parts are no longer outlined with the glowing effect