I discovered that this bug was fixed in Dorico 3.5.12. Probably this is a duplicate of this thread: Consolidate multi-bar rests not working with condensing - #7 by dspreadbury
I didn’t find the other thread before because I didn’t realize it was a bug in the “condensing” feature.
Side note: I had been checking for updates using Help > Check for Updates, but in Dorico 3.5 that option links to the wrong page: it sends you to Dorico 3 Updates and Downloads | Steinberg which is the 3.1.x update page. So when I downloaded that file and ran it, it didn’t update my 3.5 install, and I assumed there weren’t any updates. So it would be good to fix that link.