Bug: inverse highlighting doesn't display properly in terminals running inside micro

Description of the problem or steps to reproduce

Add this to your ~/.bashrc file to automagically display your current git branch name whenever you cd into a directory containing a git repo:
from my ~/.bash_aliases file here in my eRCaGuy_dotfiles repo:

gs_git_show_branch() {
    GIT_BRANCH="$(git symbolic-ref -q --short HEAD 2>/dev/null)"
    if [ -n "$GIT_BRANCH" ]; then
        echo "$GIT_BRANCH"
    fi
}
PS1="\e[7m\$(gs_git_show_branch)\e[m\n$PS1" # comment out to NOT show git branch!
PS1='\$SHLVL'":$SHLVL $PS1"                 # comment out to NOT show shell level!

This displays the shell level and the git branch name, if inside a git branch, like this:

Notice the highlighting of the master git branch name: white background, black foreground.

Well, if you open micro with micro and then use Ctrl+E then type in term bash inside micro, to open a bash terminal up inside micro, this is what that looks like:

It's broken. I expect to see the word master, as shown above, but I don't. I just see a greyed out box. If I copy/paste the content to an editor, I can see it does contain the word master, but it doesn't display properly inside micro obviously.

Specifications

Commit hash: 225927b
OS: Linux Ubuntu 22.04
Terminal: terminator 2.1.1

Reproduce the issue on Ubuntu by opening micro, pressing Ctrl-E, and running term bash with the provided PS1 configuration. Start by tracing the terminal rendering path used by this embedded shell and compare it with a normal terminal. Done means the inverse-highlighted master branch displays correctly inside micro without breaking the surrounding prompt.