iTerm does not pass focus to keyboard maestro short cut menu

When typing a keyboard shortcut which is used by multiple macros a short cut menu appears and I can type for selecting one of the items. Great functionality, I use it a lot.

If the mouse is located over a iTerm window, then any keystroke is send to below iTerm and not to the menu. This behavior is new since iTerm 3.4.6 (current version) and I could not find any setting in iTerm to disable it. Also I don't know whose fault it is.