I've had this problem for some time and have had trouble finding information about it. I think this is unrelated to the Photoshop UI settings since changing the scaling in the settings doesn't fix the problem. I'm wondering if anyone else has encountered this and have suggestions on what to do.
Photoshop's Windows context menu is supposed to be a lot smaller than this, as if each box take up too much space, definitely it's not normal to have to scroll because the boxes are this large.
Please try the registry editing solution once. Also, check once what is the current UI preferences set for Photoshop. Press Ctrl+ k ( General Setting) > Go to Interface Option> Presentation area - UI Scaling> Set as 100%> Restart your Photoshop