It’s been a long time since I’ve encountered this quirk, and I used to know how to repair it. What is causing this bar-repeat collision/condensation?
You probably did a Remove Rests command, which made the bars ‘too empty’. You can probably repair it by unticking the ‘Ends voice’ property of the last note before this region, in the Properties panel at the bottom. (Apparently, the repeat marks aren’t considered ‘real content’ by Dorico.)
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That’s it! I knew it was something exactly like that, but just couldn’t recall it. Thank you so much for your help!