Don't adjust for scrolling of the ancestor, rather than un-adjusting for it later.

third_party/WebKit/Source/core/dom/IntersectionObservation.cpp

 // Copyright 2016 The Chromium Authors. All rights reserved.
 // Use of this source code is governed by a BSD-style license that can be
 // found in the LICENSE file.
 
 #include "core/dom/IntersectionObservation.h"
 
 #include "core/dom/ElementRareData.h"
 #include "core/dom/IntersectionObserver.h"
 #include "core/frame/FrameView.h"
 #include "core/frame/LocalFrame.h"
@@ skipping 43 matching lines @@
     else
         rect = LayoutRect(toLayoutBoxModelObject(rootLayoutObject)->borderBoundingBox());
     applyRootMargin(rect);
 }
 
 void IntersectionObservation::clipToRoot(IntersectionGeometry& geometry) const
 {
     // Map and clip rect into root element coordinates.
     // TODO(szager): the writing mode flipping needs a test.
     DCHECK(m_target);
-    LayoutObject* rootLayoutObject = m_observer->rootLayoutObject();
+    LayoutBox* rootLayoutObject = toLayoutBox(m_observer->rootLayoutObject());
     LayoutObject* targetLayoutObject = target()->layoutObject();
 
-    geometry.doesIntersect = targetLayoutObject->mapToVisualRectInAncestorSpace(toLayoutBoxModelObject(rootLayoutObject), geometry.intersectionRect, EdgeInclusive);
+    geometry.doesIntersect = targetLayoutObject->mapToVisualRectInAncestorSpace(rootLayoutObject, geometry.intersectionRect, EdgeInclusive);
+    if (rootLayoutObject->hasOverflowClip())
+        geometry.intersectionRect.move(-rootLayoutObject->scrolledContentOffset());
+
     if (!geometry.doesIntersect)
         return;
     LayoutRect rootClipRect(geometry.rootRect);
-    toLayoutBox(rootLayoutObject)->flipForWritingMode(rootClipRect);
+    rootLayoutObject->flipForWritingMode(rootClipRect);
     geometry.doesIntersect &= geometry.intersectionRect.inclusiveIntersect(rootClipRect);
 }
 
 static void mapRectUpToDocument(LayoutRect& rect, const LayoutObject& layoutObject, const Document& document)
 {
     FloatQuad mappedQuad = layoutObject.localToAbsoluteQuad(
         FloatQuad(FloatRect(rect)),
         UseTransforms | ApplyContainerFlip);
     rect = LayoutRect(mappedQuad.boundingBox());
 }
@@ skipping 162 matching lines @@
     m_observer.clear();
 }
 
 DEFINE_TRACE(IntersectionObservation)
 {
     visitor->trace(m_observer);
     visitor->trace(m_target);
 }
 
 } // namespace blink