I have just tested with the pastebin code I shared previously disabled. The issue still persists.
The only other thing I can think of is maybe it has something to do with the way I am using the shortcode?
Here's how I'm adding the form:
[mb_user_profile_register password_strength='medium' role="pending_dealer" id="default-fields, dealership-user-details,dealer-contact-information,dealer-consent" confirmation="We have received your account information and your account is currently pending. In the meantime, you may log in to your account to modify your profile details. Once your account is approved, you will receive a message with further instructions." ]
The default-fields
box is added via the pastebin code I shared earlier. The rest are added with the builder, but I just double checked and all of those are set to required within the builder.