I can't see a reason why your rule wouldn't work. It looks almost exactly like the second example in this example from staff on repeated notifications: How to get Repeated Notifications using Rule Machine. Were you modifying the rule while the repeat was in effect, by chance? I wouldn't be surprised if hitting "Done" or "Update Rule" erased something and got it "stuck." That being said, since you only care about a single condition, one of their simpler examples like the first one in that thread should also work if you wanted to try something different.
The above, of course, would work too, and sometimes it's simpler to split things out like that. But I still don't see the problem with this...