I noticed today that the time displayed on my main lovelace card was incorrect. The time is advanced by one (1) hour. This may have happened coincident with DST onset but it is an hour later than DST and 2 hours ahead of PST.
I am using this template sensor to reformat the time display:
{{ as_timestamp( states('sensor.date_time_iso')) | timestamp_custom('%I:%M %p') }}
I tried using the sensor.time entity and while it does display the correct time, it is displayed in 24 hour format. Substituting sensor.time in the above template does not work. It seems to simply ignore the formatting.
HA ver 2021.12.3 running in Docker
UPDATE:
The following works correctly but does not answer the question about the behavior of date_time_iso.
{{ now().strftime("%I:%M") }}