I've tried:
- making parent's overflow hidden
 - making z-index negative
 
I've noticed that the issue appears only when the 'outline' is set to 'auto'. 
Any ideas to fix it without messing with browser's default outline?
Thank you.
#switch {
  position: relative;
  background: transparent;
  border: 0;
  width: 30px;
  height: 30px;
  padding: 0;
  display: flex;
  align-items: center;
  justify-content: center;
  overflow: hidden;
}
#switch:focus {
  outline: 5px dotted blue;
  outline-style: auto;
  z-index: 0;
}
#switch .mode {
  position: relative;
  width: 20px;
  height: 20px;
  border-radius: 50%;
  background: #1a202c;
  transition: transform 0.45s ease;
}
#switch .mode::after {
  content: "";
  position: absolute;
  width: 100%;
  height: 100%;
  top: -30%;
  left: 30%;
  border-radius: 50%;
  background: white;
  transition: transform 0.45s ease;
}
<button id="switch">
    <div class="mode"></div>
  </button>