Custom Post Type Category Display

When creating a new WP Latest Posts block and selecting to display content by Custom Post Type / Category / Category Name, the category name isn't displaying properly. The HTML is listing the category for each post of that Custom Post Type. And instead of showing the category associated with the correct post, it is always displays the most recent posts category. Per the developer notes, the category field is pulling an array and showing the latest, but I only want to display the category related to the listed post.

What use is displaying the category of a post if it isn't the category associated with that post?