The Hide My Email option offered at top-centre of the onscreen keyboard (first image) provides an easy method to either (a) create a new Hide My Email address - and/or use an existing Hide My Email address when populating the box that appears above. This is entirely as expected. You will only use this button if you intend to use a Hide My Email address.
The second image above shows that you don't have any preconfigured Hide My Email addresses - but can create one (should you wish to do) so using the blue Create New Address button.
You'll also note the Autofill Contact option at top-left of the onscreen keyboard - which, if chosen, will instead populate the box with your actual contact details (from your own Contact Card within the Contacts App) including your real email address. Again, this is entirely as expected - and is used to quickly and automatically populate a form with your real details.
Your third option is to manually enter details of your choice - using the Keyboard.
In summary, your iPad appears to be working entirely as expected - illustrating the integrated nature of iPadOS and some of its many features.