This was first reported here:
Yaron has some guesses about the cause here:
"My guess is that this is due to the higher MediaWiki version, and the
ResourceLoader, in some way. It could be that files are getting called in
the wrong order - SF's CSS changes to override jQuery's CSS are called
before the jQuery CSS.
There's another problem, where the HTML in the dropdown when you actually
start typing in the combobox is getting escaped - I've never seen that
before either, but my guess is that it's due to the same thing."
It is also mentioned that changing to the monobook skin resolves the issue.