Closing as by design. One unexpected aspect of OR blocks is, in order for them to work correctly at all, they must be able to run with possibly zero instances selected for a type. "Layer 1" is invisible and it's in an OR block so the event is definitely going to run its actions based off that alone. The next condition tests for sprites which have var = 1, and none do. So the event engine picks zero of those instances and proceeds to run the actions. The actions run for all picked instances, so the Sprite action runs zero times and Sprite2 was not referenced so runs for all instances (once in this case).
Note if you saw Sprite rotating, it would contradict the fact you have a condition that says it should not rotate.