To achieve a button with a border with rounded corners you can use the OutlinedButton component applying in the shape parameter a RoundedCornerShape:
OutlinedButton(
onClick = { },
border = BorderStroke(1.dp, Color.Red),
shape = RoundedCornerShape(50), // = 50% percent
// or shape = CircleShape
colors = ButtonDefaults.outlinedButtonColors(contentColor = Color.Red)
){
Text( text = "Save" )
}

It works with M2 and M3.