Ok, I figured out how to reproduce it!
1) add new hotkey
2) click "custom" button to edit description. type "TEST"
3) now click "Change" button next to "Item Type" and double-click "slimLAUNCH.FileSystem"
The lower buttons should now be slightly cut off on the bottom, as shown above. This ONLY happens when you hit CUSTOM and type a description BEFORE choosing the slimLAUNCH.FileSystem plugin.
please confirm if you are able to also reproduce this. 