You need to UNcheck Recognize links and emails. But more importantly, is there a reason you’re not using an actual Link element? That’s exactly what it’s for.
Yes, what that setting actually means is, “Recognize raw URLs and email addresses that appear in this text element as hyperlinks.” So for instance, if one simply copied and pasted some text that contained a URL, then that URL would be converted “on the fly” into a hyperlink.
So technically, the label for that setting is incorrect. It’s not recognizing “links” per se; rather, it’s recognizing raw URLs and email addresses and then automatically converting them to [hyper]links. And apparently, with that setting enabled, BBCode is not parsed.