Default settings for the shader are a bit wacky rn
Its reccomended to change the handOpacity up in shader options > opacity to about 0.7 or 0.8
Its also reccomended to take the entitylighting down to 0.1 or 0 and change the entity brightness up to 1.25
I can not guarantee that the highlighting feature is not considered cheating in your server, if your server allows fullbright (such as hypixel) it is probably ok