It seems that GoodNotes 5 treats shapes drawn by using the shape tools just like regular handwritings made by the pen tools, but this becomes a problem when it comes to handwriting recognition/search.

When I draw shapes such as boxes or ovals over handwritings for highlighting certain words or phrases, handwritings are not recognized well.

The only workaround seems to be using the highlighter tools since GN5 doesn't consider highlighters as text to be recognized but highlighter tools don't offer precise thickness control unlike the pen tools.

Notability seems to treat both the highlighter and the shapes differently to handwriting tools and it does recognize handwritings correctly even if additional shapes are drawn over them.

I hope GN5 adopt the same way regarding the mixture of handwriting by the pen tools and shapes by the shapes tool