[Outline in 4.0.4]

Once I finish editing the text that I want, I access outline from the toolbar at the top of the window:

Effects -> Stylize -> Outline

[Outline in 4.0.4]

I just installed the 4.0.4 update, then went to outline some text, and it wouldn't work. Even when I started a new project, cleared the layer, or even started a new layer, the outline option would turn the entire layer white, with a small bit of transparency around the edges of the text.

 

The issue is similar to what happens in 4.0.3 when you try to outline text before you clear the layer; the entire layer turns white, even if it was transparent before, and your text gets an outline.

 

I've reverted back to 4.0.3 for now.