The ::view-transition pseudo-element is positioned relative to the snapshot root outlined in the spec here irrespective of the value of its position property. This was resolved in #7859.

It is also meant to be the containing block for its child pseudo-elements, the ::view-transition-group, clarified in the spec here. This is done by UA CSS setting its position property to fixed.

It's unclear what should happen if developer CSS modifies the position value for this element. We don't have any developer use-case where that's needed. Also the transform value computed by the UA and set on ::view-transition-group pseudo-elements is in the snapshot root's coordinate space. This relies on these elements being positioned relative to ::view-transition which itself uses snapshot root as its containing block.

The proposal is to state that the position value for ::view-transition always computes to fixed. I'd also be open to using absolute since its containing block is not the ICB and the desired behaviour is to make it a containing block for descendants. This is similar to what's done for top layer elements, spec'd here.