Swing won't trigger mouseEntered/mouseExited properly after mouse wheel events?

This seems like a similiar problem to the one described in Tooltips and Scrollpanes. That is, no mouse events are generated because the mouse itself doesn't move, the viewport moves. I'm not sure the exact solution other using the AdjustmentListener to track the component at the mouse location. Every time is changes you can fire a mouseExited event to the previous panel and a mouseEntered event to the new panel.

I can get your code to reproduce this reliably but only when I don't quite finish the scrolling. On my mouse at least there is sort of a "catch" when the mouse wheel finished scrolling. If I scroll very slowly I can have it move but it doesn't change the highlight until the mouse wheel has reached the "catch".

When I do that the mouse enter message is received on the previous panel (same behaviour you are seeing).

Looking at it I scroll the mouse and it does not actually receive the exited/entered events unless I scroll enough to have the mouse wheel "catch". It is possible that Windows does not send the message to Java until the "catch" happens... from my testing that is what it looks like.

You might want to look into the MouseWheelListener interface and the MouseInfo class. I guess you might be able to detect the wheel movement and then figure out where you are with MouseInfo.getPointerInfo().getLocation() and then figure out what component you are over and change the highlighting.