Regardless of what you specify the tame item to be, the item neither tames the dragon nor draws its attention. It's possible that breed items have this problem too, but I am unable to test for it at this time.

I'm looking into this, but I have a preliminary guess. If you're specifying a single item instead of an item tag, that may be the issue. I think the breeds only support tags for taming and breeding items.

What MC version and mod version are you on? For now, I'll just test on the latest 1.19.2.

to clarify, homogenous lists can be defined with tags, or a series of items.
For example, a usage of tags uses a # like so
Or a series of items ["minecraft:stick", "minecraft:ender_pearl", "minecraft:bone"] (of course, this list can have one entry)

The above seems to be the case, HOWEVER, I will still label this as a bug as it's not implied that individual items can be used, rather than tags.
To make lives easier, I may make them dual input fields to cover that base.