Its the actual feather producing that edge blur.
If you need a rounded rectangle, use the Rounded Rectangle Tool, with settings for corner radius, fill, etc: https://helpx.adobe.com/photoshop/how-to/edit-rounded-rectangles.html
It might be that your layer is a smart object
try to right-click on your layer and click rasterize layer
after then you could cut the photo.
be careful to duplicate your smart object layer because once you rasterize it
it won't be a smart object again so be aware to have a copy of the original once.
To be able to cut you need to make sure:
layer is not locked
layer is not smart object. generally, needs to be a raster layer (no vector shapes)
you need to have something selected (i don't see anything selected in your image)
you can not cut from a Smart Object layer, you can copy, just can not cut. Have to rasterize it to cut.
Similar problem: If you can not cut AS WELL AS copy a selection, you must be working on a shape, and still, you got to rasterize it.
It's not a bug, but a difference in behaviour. When you paste in GIMP, unlike Photoshop, it creates a floating selection layer. Open the layers panel and you will see it. You need to promote the floating selection to a proper layer. To do that hit the new layer icon (in the layers panel) directly after pasting or press Shift+Ctrl+N. Now the selection tools ...