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It is producing a dashed stroke of 10 black pixels separated by 1 skip. I do not see anything in his command to say that it should not be drawing the stroked lines. However, there are excess lines connecting the characters, which should not be there. So this still would appear to be a bug.
As a workaround, I tried to draw each letter separately and append them. (However, this probably would not be a universal solution including letters with negative y-min in the font metric, such as "y").
Nevertheless, the letter "b" still has an extraneous line in it.
The ImageMagick native renderer does not support dashed strokes for text. We rely on the Freetype outline methods, they do not create separate paths for outer and inner outlines (e.g. the letter b). ImageMagick stroking supports ghostlines (the invisible line that connects inner and outer strokes), but the dashed strokes method does not have access to the ghostlines. We did not write the dashed stroked method and do not currently have solution for fixing this problem. As always, ImageMagick is open-source. We encourage you to review the magick/draw.c/DrawDashPolygon() method to fix this deficiency.