That bug is a dupe of this one. This was reported in 2018 that one was 2020
Im not sure how to update this, but I tested it in 1.17 and it seems as though its not fixed; though it does spawn you further from the -z boarder. instead, it now spawns you about +/-16 blocks from -29999570 on the z axis
after some experimentation, it seems that with any size spawn radius, it will almost always spawn the player about 16 blocks from the -z; appearing to be an issue where the values for how far away to spawn the player are a fixed value instead of the value of the gamerule itself for the z axis.
More information: only happens with items that are using generic item model (non 3d model) and looking through any semi-transparent block. tested with multiple colors of stained glass, honey block, and slime block. tested multiple with blocks and items in item frame.
this is happening because your command is not running the command as the cow, and its teleporting all the cows for each cow. try this instead: /execute as @e[name=Blue1] at @s run tp @s ^.1 ^0 ^.1 facing entity @e[name=Bob,limit=1,sort=nearest] eyes
edit: also, the cow will slightly float because the cow's feet are below the zombie's eyes.
edit2: if you want the cow to also not orbit the zombie, and also stay on the ground, change the command to: /execute as @e[name=Blue1] at @s run tp @s ^0 ^0 ^.1 facing entity @e[name=Bob,limit=1,sort=nearest] feet
I disagree that this is the same issue. that issue has to do with spawners not dispensers
the issue you mentioned also has nothing to do with what this is. all other entities I have tested work, even tridents with motion data. the only entities that have any issue with dispensers are falling_block, and makes me think it has something to do with the falling_block and the way that is summoned by dispensers rather than anything else.
ok, nvm then..
second attempt, but at multiple locations instead of just at a single location as in the first test.
I've also found that doing custom armor trims also has this same issue (I have custom trims and materials on my server using a datapack and resource pack); its not just custom model data- its any override data at all. confirmed for 1.20.4