In Windows Terminal 0.11.1121.0, a new VT colors bug has been introduced.

When output contains VT escape sequences to set the background color, they are handled properly while the output is in the visible buffer viewport, but stops being applied to cells containing spaces when the output has to scroll to show the result.

The command used for repro is the following:
echo -e "\e[m\r\n\e[44;32m # \e[m#"
(4 spaces before first #, and 9 spaces after, GitHub HTML rendering swallows the extra spaces)

It reliably works fine until you reach the last line of the viewport, then the background color stops after the first # character:

Just make sure you repeat the command until you reach the bottom of the viewport.