What you want is a button highlight that is not a subpicture layer.
In DVD-Video, most commercial titles use the subpicture layer for button highlights. The subpicture layer is always a 2 bit overlay that allows simple color and opacity - no images, glows, drop shadows, etc. This is Encore's default button highlighting mode when using button layers with the (=1,2,3) prefix.
It is possible to have a button highlight that uses a picture instead of the subpicture layer, but it requires avoiding subpicture layers and instead making a separate menu for each button highlight, and then use auto-activate on the button to switch to the next menu when the button is selected.
The downside to not using the subpicture layer for button highlights is it's a lot of work to create separate menus for each button highlight, especially if you have lots of buttons, and that this kind of menu will not work with software DVD players (you have to press the button to go to the next menu). Also, sometimes these types of menus have performance problems in some standalone DVD players.
My advice would be to stick to what the DVD-Video specification calls for: use the simple graphical subpicture layer to indicate button status. This is what nearly all the Hollywood studios do on their release DVDs.