I’m assuming the highlighting is yours?
It seems to affect whole words, so the spacebar may somehow be triggering it.
Yes. And, crucially perhaps, there are no spaces. It’s as though hitting space doesn’t send a space but rather puts the keyboard into some sort of odd mode, then hitting space again clears it.
If it weren’t for the fact that it’d happened on another computer, I’d be leaning towards a faulty keyboard at this point. Driver issue maybe? Go to device manager, right-click on the keyboard entry and select Update Driver.
Failing that, I expect this will fix it:
https://www.amazon.co.uk/Logitech-MK270-Wireless-Keyboard-Windows/dp/B00CL6353A/
Remind me again, what’s the make and model of your laptop? Is your missus’ the same?