You have encountered a known bug.
The alternative method to select the time is to simply swipe your finger up or down on the hour - and the same for minutes:

As for the bug itself, you and others that encounter the problem should submit a Bug Report directly to Apple via its Product Feedback portal. For iPad and iPadOS:
Feedback - iPad - Apple
Every report counts - as until Apple receive a sufficient number or reports, it is perhaps unlikely that resources will be assigned to investigate and resolve the issue.
When submitting a report, ensure that you include as much detail as possible within the body of the report - including your iPad model and installed version of iPadOS; don’t rely upon the pick-list, as this rarely includes the full range of device models or most recent versions of iOS/iPadOS.
You might include a link to this discussion thread within your Bug Report - as it may help in describing the isue:
Calendar and Reminders Time Issue - Apple Community