Not sure about the computer going "on-off-on", but I did notice that when ErP S5 was turned on for me, it took longer for the PC to switch on at all. Perhaps that's related? Either way, I had a similar issue to you - LED lights were on even when the PC was off, enabling ErP compliance wasn't the best solution.
Have you tried installing ASUS' Aura software to configure the LED lighting from there? I'm currently using Aura 1.04.29 and there's an "Independent" tab which allows you to choose different lighting effects for when the PC is on and when it is off/sleeping/hibernating. I've selected "Off", and that fixes the issue for me: LEDs are on when the PC is "fully on", LEDs are off when the PC is in sleep/soft-off.