As outlined above the Array isn't necessary but in terms of explanation...
First off - it's not a bug
ROW returns an Array at all times - a cell can only display 1 item so though ROW is returning an Array of values the cell itself will only display 1 item (relative to index pos. etc)
This is why
applied to A1:A5 as an Array displays 1 to 5 - yet if you F9 on any of the cells formulae from within the Formula Bar you will note {1;2;3;4;5} displays in the Formula Bar
For this reason your tests all return 1 because in each Array there is a 1 and a 3 and thus the OR is always true.
To get 1s and 0s using Array entry you could use:
again though - we're not saying you should
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