Set background color and border color of Button using Shape Drawable in Android 8

Short answer:.
You don't need to define a background shape, just use a MaterialButton with the shapeAppearanceOverlay attribute:

        <com.google.android.material.button.MaterialButton
            android:layout_width="100dp"
            android:layout_height="100dp"
            style="@style/Widget.MaterialComponents.Button"
            app:backgroundTint="@color/...."
            app:strokeColor="@color/...."
            app:strokeWidth="5dp"
            android:padding="0dp"
            android:insetLeft="0dp"
            android:insetTop="0dp"
            android:insetRight="0dp"
            android:insetBottom="0dp"
            android:text="BUTTON"
            app:shapeAppearanceOverlay="@style/ShapeAppearanceOverlay.MyApp.Button.Circle"
            />

with:

<style name="ShapeAppearanceOverlay.MyApp.Button.Circle" parent="">
    <item name="cornerFamily">rounded</item>
    <item name="cornerSize">50%</item>
</style>

Long answer:
If you want to use a background shape you have to add app:backgroundTint="@null".
Something like:

<Button
    android:layout_width="100dp"
    android:layout_height="100dp"
    android:background="@drawable/shape_oval"
    app:backgroundTint="@null"

Using a Material Components Theme the Button is replaced at runtime by a MaterialButton which use a own MaterialShapeDrawable as background. You can define a custom background but to avoid that the custom background doesn't get tinted you have to add app:backgroundTint="@null".
The 2 solutions are not equivalent.
Using a custom android:background the default MaterialShapeDrawable is not used and some features like stroke, shapeappearance, ripple are not set (since they are related to the MaterialShapeDrawable) . You have to provide them with your custom background.