How to fix morphing shape from moving oddly?

Nothing wrong. You just need to work on the mask and add more points to control these things and find a better way to implement the design as a whole. It's simply not the greatest of design ideas in the first place and such obvious morphs of course will always look iffy unless they are perfectly tweaked and that, for all intents and purposes can't be done by just relying on AE's built-in mechanics. Chances are you may indeed face some long and tedious work with having to tweak this every second frame and ending up with hundreds of points on what otherwise looks like a simple geometric shape, including possibly splitting up individual segments for better control. No quick answers here. You simply have to put in the work.

Mylenium