diff --git a/lua/lualine/component.lua b/lua/lualine/component.lua
index b52511b..864f31e 100644
--- a/lua/lualine/component.lua
+++ b/lua/lualine/component.lua
@@ -83,7 +83,17 @@ local Component = {
       self.status = highlight.component_format_highlight(
                         self.options.color_highlight) .. self.status
     end
-    self.status = self.status .. default_highlight
+    if type(self.options.separator) ~= 'table' and self.status:find('%%#') then
+      -- Apply default highlight only when we aren't applying trans sep and
+      -- the component has changed it's hl. since we won't be applying
+      -- regular sep in those cases so ending with default hl isn't neccessay
+      self.status = self.status .. default_highlight
+      -- Also put it in applied sep so when sep get struped so does the hl
+      self.applied_separator = default_highlight
+    end
+    -- Prepend default hl when the component doesn't start with hl otherwise
+    -- color in previous component can cause side effect
+    if not self.status:find('^%%#') then self.status = default_highlight .. self.status end
   end,
 
   -- Apply icon in front of component
@@ -110,7 +120,7 @@ local Component = {
     end
     if separator and #separator > 0 then
       self.status = self.status .. separator
-      self.applied_separator = separator
+      self.applied_separator = self.applied_separator .. separator
     end
   end,
 
@@ -139,12 +149,13 @@ local Component = {
   status = '',
   -- Actual function that updates a component. Must be overwritten with component functionality
   -- luacheck: push no unused args
-  update_status = function(self) end,
+  update_status = function(self, is_focused) end,
   -- luacheck: pop
 
   -- Driver code of the class
   draw = function(self, default_highlight, is_focused)
     self.status = ''
+    self.applied_separator = ''
 
     if self.options.condition ~= nil and self.options.condition() ~= true then
       return self.status
@@ -156,8 +167,8 @@ local Component = {
       self:apply_icon()
       self:apply_case()
       self:apply_padding()
-      self:apply_section_separators()
       self:apply_highlights(default_highlight)
+      self:apply_section_separators()
       self:apply_separator()
     end
     return self.status
diff --git a/lua/lualine/init.lua b/lua/lualine/init.lua
index 3566209..12a237a 100644
--- a/lua/lualine/init.lua
+++ b/lua/lualine/init.lua
@@ -19,7 +19,7 @@ local function apply_transitional_separators(status)
 
   local function find_next_hl()
     -- Gets the next valid hl group from str_checked
-    local hl_pos_start, hl_pos_end = status:find('%%#.-#', str_checked + 1)
+    local hl_pos_start, hl_pos_end = status:find('%%#.-#', str_checked)
     while true do
       if not hl_pos_start then return nil end
       -- When there are more that one hl group next to one another like
@@ -67,6 +67,11 @@ local function apply_transitional_separators(status)
       -- %S{sep} is marker for right separator and
       local sep = status:match('^%%S{(.-)}', str_checked)
       str_checked = str_checked + #sep + 4 -- 4 = len(%{})
+      if status:find('^%%s', str_checked) then
+        -- When transitional right_sep and left_sep are right next to each other
+        -- and in this exact order skip the left sep as we can't draw both.
+        str_checked = status:find('}', str_checked) + 1
+      end
       fill_section_separator(sep, true)
       copied_pos = str_checked
     elseif next_char == '%' then
@@ -102,7 +107,6 @@ local function statusline(sections, is_focused)
       end
     end
   end
-
   return apply_transitional_separators(table.concat(status))
 end
 
diff --git a/lua/lualine/utils/section.lua b/lua/lualine/utils/section.lua
index e508521..ba009d1 100644
--- a/lua/lualine/utils/section.lua
+++ b/lua/lualine/utils/section.lua
@@ -70,8 +70,18 @@ function M.draw_section(section, section_name, is_focused)
   status = utils.list_shrink(status)
   local status_str = table.concat(status)
 
-  if #status_str == 0 then return ''
-  elseif status_str:find('%%#.*#') == 1 then
+  if #status_str == 0 then return '' end
+
+  local needs_hl
+
+  local find_start_trans_sep_start, find_start_trans_sep_end = status_str:find('^%%s{.-}')
+  if find_start_trans_sep_start then
+    -- the section doesn't need to be prepended with default hl when sections
+    -- first component has trasitionals sep
+    needs_hl = status_str:find('^%%#', find_start_trans_sep_end + 1)
+  else needs_hl = status_str:find('^%%#') end
+
+  if needs_hl then
     -- Don't prepend with old highlight when the component changes it imidiately
     return left_sparator_string .. status_str
   else