As you can see, the menu items are too short and missing the icon gutter. These are typical effects from an attempt to owner-draw a menu and not doing so well or from strange combinations of window flags.
The shell notification area context menu for the agent (even from FaTTY) looks fine, as do the submenus on the main application's menu.
This is the menu that is shown when ctrl+right-clicking on the main putty window (with the default mouse bindings); presumably mutilated to look like some classical xterm menu.
GH-91: Drop MNS_NOCHECK to make menus look more normal
Apparently this is caused entirely by the MNS_NOCHECK flag to MENUINFO. While it's correct, I agree it makes the menu look bizarre.
Fixed for p0.63-t020.