It's not a glitch but it's a commonly encountered limitation. But think about what your user would see if this were not the case. In the drop down list, they'd see:
And they would not have any way to tell which Smith is the correct one to select as they would be presented identically in your drop down list. (even showing the ID number from the primary field is unlikely to make that any better.)
The simplest way to handle this issue is to set up a field that combines more information with the last name to make for a unique name to list in the secondary field. Combining first and last name in a calculation may be sufficient or you may need to include additional info such as a job title, address, or phone number. If you use an auto-entered calculation on a text field to combine these values for use with the value list, you can set a Unique values validation requirement to ensure that you don't get duplicates like this.
There are other more sophisticated ways you can set up that use different interface designs and scripted support to make working with long value lists a more user friendly experience.