windows explorer bug ?

XP with SP1. windows explorer near bottom of screen in
classic view. clicking 'file' menu option drops down a
menu. pointing at 'new' menu option causes the context
sensitive menu to appear with the bottom entry horizontally
level with the 'new' menu option. Moving with the mouse to
this, then up the context list to the next item causes the
context menu to be dismissed, and the underlying main menu
opion (usually 'favorites') to appear depressed (i.e. mouse
capture passes from the context menu even if the mouse is
over the context menu). There is a work around, in that if
there is no underlying menu option (e.g. if the mouse is
moved to the far right of the context menu which has a
lengthy text) then things work as expected; also using the
up arrow key works as normal.
This appears to be a bug. anyone else seen this ?