update

src/gnome-shell/sass/widgets/_dash.scss

@@ -67,11 +67,11 @@ $dash_border_radius: if($corner_style == 'circular', $circular_radius, $buttons_
 .dash-label {
   border-radius: if($corner_style == 'circular', $circular_radius, $material_radius);
   padding: $container_padding $container_padding * 2;
+  margin: $container_margin * 2 $container_margin;
   color: $inverse_fg_color;
   background-color: rgba(black, 0.75);
   border: none;
   box-shadow: $shadow_2;
   text-align: center;
-  // margin-bottom: $container_padding;
-  -y-offset: $container_margin * 2; // distance from the dash edge
+  -y-offset: 0; // distance from the dash edge
 }

src/gnome-shell/shell-40-0/gnome-shell-Compact.css

@@ -2368,12 +2368,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 4px 8px;
+  margin: 4px 2px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 4px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-40-0/gnome-shell-Dark-Compact.css

@@ -2368,12 +2368,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 4px 8px;
+  margin: 4px 2px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 4px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-40-0/gnome-shell-Dark.css

@@ -2368,12 +2368,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 6px 12px;
+  margin: 8px 4px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 8px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-40-0/gnome-shell.css

@@ -2368,12 +2368,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 6px 12px;
+  margin: 8px 4px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 8px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-42-0/gnome-shell-Compact.css

@@ -2713,12 +2713,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 4px 8px;
+  margin: 4px 2px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 4px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-42-0/gnome-shell-Dark-Compact.css

@@ -2717,12 +2717,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 4px 8px;
+  margin: 4px 2px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 4px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-42-0/gnome-shell-Dark.css

@@ -2717,12 +2717,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 6px 12px;
+  margin: 8px 4px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 8px;
+  -y-offset: 0;
 }
 
 /* App Grid */

src/gnome-shell/shell-42-0/gnome-shell.css

@@ -2713,12 +2713,13 @@ StScrollBar StButton#vhandle:active, StScrollBar StButton#hhandle:active {
 .dash-label {
   border-radius: 9999px;
   padding: 6px 12px;
+  margin: 8px 4px;
   color: rgba(255, 255, 255, 0.85);
   background-color: rgba(0, 0, 0, 0.75);
   border: none;
   box-shadow: 0 3px 3px rgba(0, 0, 0, 0.24), 0 3px 3px rgba(0, 0, 0, 0.345);
   text-align: center;
-  -y-offset: 8px;
+  -y-offset: 0;
 }
 
 /* App Grid */