None of the popup menus have any visual indication that overflow menu items are hidden. For example, the rich text (blocks) editor in the attached screenshot. But its is not limited to that menu, all menus are affected. I've seen lots of users open menus, not seeing the menu entry that they are looking for, and closing the menu again. Had they scrolled up/down then they would have found the desired option, but there is no visual indication that one can scroll.

Yes, if you move the mouse over the menu then the vertical scrollbar appears. But users tend to close the menu if they don't see the option they are looking for, they don't hover over it.

I'm using Chrome on Fedora Linux.