Segregating paks

I am trying to break my character subsystems into separate paks while packaging my project. I set up PALs for all my maps by selecting the MAP in the PAL. When I tried to package my character subsystem I just depended on the fact that it would select the folders underneath my character subsystem. What I found while packaging is that most of the assets in these character folders were packaged into chunk 0 instead of the chunk I had set up in the PAL for characters using the folders in directory option. Why would the packaging system ignore my PAL and instead put the majority of the assets in the chunk 0 pak?

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I am having the same issue with my project in UE5.0 Primary Asset Labels and Data listed in Project Settings but they do not compile separately to pak files as they did in 4.27