The items at 1 and 2 were alt/click copied from bars 1 and 3.
Playback from the start works correctly (chords and melody). But if I start playback anywhere from bar 5-8, a single E chord plays! (There is nothing showing on the chord track)
Can you attach the project itself, rather than just a picture?
Perhaps you have hidden chord symbols in that region? Are you hiding all signposts? If so, try switching off View > Signposts > Hide Signposts to see if that reveals a hidden chord symbol.
It seems to be replicable. Here’s a simpler example (using a different VST for the chord track).
Play from the start and it behaves as expected. Playback from anywhere else and the Em chord sounds
I don’t hear that, I’m afraid, in your example. Perhaps try adding a N.C. chord symbol at the point at which you no longer want to hear the previous chord: that should stop the prevailing chord from sounding at that point.
Dorico plays each chord indefinitely, only replacing it with the next chord once it encounters it. It’s pretty simplistic at the moment, but that’s how it works.