diff --git a/packages/block-editor/src/components/block-popover/index.js b/packages/block-editor/src/components/block-popover/index.js
index 2413601a590e2e..47022e336e4869 100644
--- a/packages/block-editor/src/components/block-popover/index.js
+++ b/packages/block-editor/src/components/block-popover/index.js
@@ -20,6 +20,7 @@ import {
  */
 import { useBlockElement } from '../block-list/use-block-props/use-block-refs';
 import usePopoverScroll from './use-popover-scroll';
+import { rectUnion, getVisibleElementBounds } from '../../utils/dom';
 
 const MAX_POPOVER_RECOMPUTE_COUNTER = Number.MAX_SAFE_INTEGER;
 
@@ -87,34 +88,12 @@ function BlockPopover(
 
 		return {
 			getBoundingClientRect() {
-				const selectedBCR = selectedElement.getBoundingClientRect();
-				const lastSelectedBCR =
-					lastSelectedElement?.getBoundingClientRect();
-
-				// Get the biggest rectangle that encompasses completely the currently
-				// selected element and the last selected element:
-				// - for top/left coordinates, use the smaller numbers
-				// - for the bottom/right coordinates, use the largest numbers
-				const left = Math.min(
-					selectedBCR.left,
-					lastSelectedBCR?.left ?? Infinity
-				);
-				const top = Math.min(
-					selectedBCR.top,
-					lastSelectedBCR?.top ?? Infinity
-				);
-				const right = Math.max(
-					selectedBCR.right,
-					lastSelectedBCR.right ?? -Infinity
-				);
-				const bottom = Math.max(
-					selectedBCR.bottom,
-					lastSelectedBCR.bottom ?? -Infinity
-				);
-				const width = right - left;
-				const height = bottom - top;
-
-				return new window.DOMRect( left, top, width, height );
+				return lastSelectedElement
+					? rectUnion(
+							getVisibleElementBounds( selectedElement ),
+							getVisibleElementBounds( lastSelectedElement )
+					  )
+					: getVisibleElementBounds( selectedElement );
 			},
 			contextElement: selectedElement,
 		};
diff --git a/packages/block-editor/src/components/block-tools/block-toolbar-popover.js b/packages/block-editor/src/components/block-tools/block-toolbar-popover.js
index 8428222268408a..c6378130b7da42 100644
--- a/packages/block-editor/src/components/block-tools/block-toolbar-popover.js
+++ b/packages/block-editor/src/components/block-tools/block-toolbar-popover.js
@@ -47,15 +47,19 @@ export default function BlockToolbarPopover( {
 		isToolbarForcedRef.current = false;
 	} );
 
+	// If the block has a parent with __experimentalCaptureToolbars enabled,
+	// the toolbar should be positioned over the topmost capturing parent.
+	const clientIdToPositionOver = capturingClientId || clientId;
+
 	const popoverProps = useBlockToolbarPopoverProps( {
 		contentElement: __unstableContentRef?.current,
-		clientId,
+		clientId: clientIdToPositionOver,
 	} );
 
 	return (
 		! isTyping && (
 			<BlockPopover
-				clientId={ capturingClientId || clientId }
+				clientId={ clientIdToPositionOver }
 				bottomClientId={ lastClientId }
 				className={ clsx( 'block-editor-block-list__block-popover', {
 					'is-insertion-point-visible': isInsertionPointVisible,
diff --git a/packages/block-editor/src/components/block-tools/use-block-toolbar-popover-props.js b/packages/block-editor/src/components/block-tools/use-block-toolbar-popover-props.js
index 0ca0f6e5a43dda..6d64f5a5882cb8 100644
--- a/packages/block-editor/src/components/block-tools/use-block-toolbar-popover-props.js
+++ b/packages/block-editor/src/components/block-tools/use-block-toolbar-popover-props.js
@@ -17,6 +17,7 @@ import {
 import { store as blockEditorStore } from '../../store';
 import { useBlockElement } from '../block-list/use-block-props/use-block-refs';
 import { hasStickyOrFixedPositionValue } from '../../hooks/position';
+import { getVisibleElementBounds } from '../../utils/dom';
 
 const COMMON_PROPS = {
 	placement: 'top-start',
@@ -67,7 +68,7 @@ function getProps(
 	// Get how far the content area has been scrolled.
 	const scrollTop = scrollContainer?.scrollTop || 0;
 
-	const blockRect = selectedBlockElement.getBoundingClientRect();
+	const blockRect = getVisibleElementBounds( selectedBlockElement );
 	const contentRect = contentElement.getBoundingClientRect();
 
 	// Get the vertical position of top of the visible content area.
diff --git a/packages/block-editor/src/utils/dom.js b/packages/block-editor/src/utils/dom.js
index 6af35aff730155..e41ade344e49d8 100644
--- a/packages/block-editor/src/utils/dom.js
+++ b/packages/block-editor/src/utils/dom.js
@@ -57,3 +57,110 @@ export function getBlockClientId( node ) {
 
 	return blockNode.id.slice( 'block-'.length );
 }
+
+/**
+ * Calculates the union of two rectangles, and optionally constrains this union within a containerRect's
+ * left and right values.
+ * The function returns a new DOMRect object representing this union.
+ *
+ * @param {DOMRect}          rect1         First rectangle.
+ * @param {DOMRect}          rect2         Second rectangle.
+ * @param {DOMRectReadOnly?} containerRect An optional container rectangle. The union will be clipped to this rectangle.
+ * @return {DOMRect} Union of the two rectangles.
+ */
+export function rectUnion( rect1, rect2, containerRect ) {
+	let left = Math.min( rect1.left, rect2.left );
+	let right = Math.max( rect1.right, rect2.right );
+	const bottom = Math.max( rect1.bottom, rect2.bottom );
+	const top = Math.min( rect1.top, rect2.top );
+
+	/*
+	 * To calculate visible bounds using rectUnion, take into account the outer
+	 * horizontal limits of the container in which an element is supposed to be "visible".
+	 * For example, if an element is positioned -10px to the left of the window x value (0),
+	 * this function discounts the negative overhang because it's not visible and
+	 * therefore not to be counted in the visibility calculations.
+	 * Top and bottom values are not accounted for to accommodate vertical scroll.
+	 */
+	if ( containerRect ) {
+		left = Math.max( left, containerRect.left );
+		right = Math.min( right, containerRect.right );
+	}
+
+	return new window.DOMRect( left, top, right - left, bottom - top );
+}
+
+/**
+ * Returns whether an element is visible.
+ *
+ * @param {Element} element Element.
+ * @return {boolean} Whether the element is visible.
+ */
+function isElementVisible( element ) {
+	const viewport = element.ownerDocument.defaultView;
+	if ( ! viewport ) {
+		return false;
+	}
+
+	// Check for <VisuallyHidden> component.
+	if ( element.classList.contains( 'components-visually-hidden' ) ) {
+		return false;
+	}
+
+	const bounds = element.getBoundingClientRect();
+	if ( bounds.width === 0 || bounds.height === 0 ) {
+		return false;
+	}
+
+	return element.checkVisibility( {
+		opacityProperty: true,
+		contentVisibilityAuto: true,
+		visibilityProperty: true,
+	} );
+}
+
+/**
+ * Returns the rect of the element including all visible nested elements.
+ *
+ * Visible nested elements, including elements that overflow the parent, are
+ * taken into account.
+ *
+ * This function is useful for calculating the visible area of a block that
+ * contains nested elements that overflow the block, e.g. the Navigation block,
+ * which can contain overflowing Submenu blocks.
+ *
+ * The returned rect represents the full extent of the element and its visible
+ * children, which may extend beyond the viewport.
+ *
+ * @param {Element} element Element.
+ * @return {DOMRect} Bounding client rect of the element and its visible children.
+ */
+export function getVisibleElementBounds( element ) {
+	const viewport = element.ownerDocument.defaultView;
+	if ( ! viewport ) {
+		return new window.DOMRect();
+	}
+
+	let bounds = element.getBoundingClientRect();
+	const viewportRect = new window.DOMRectReadOnly(
+		0,
+		0,
+		viewport.innerWidth,
+		viewport.innerHeight
+	);
+
+	const stack = [ element ];
+	let currentElement;
+
+	while ( ( currentElement = stack.pop() ) ) {
+		for ( const child of currentElement.children ) {
+			if ( isElementVisible( child ) ) {
+				const childBounds = child.getBoundingClientRect();
+				bounds = rectUnion( bounds, childBounds, viewportRect );
+				stack.push( child );
+			}
+		}
+	}
+
+	return bounds;
+}