After that change and restart chrony should listen on port 123.
EDIT:
that still doesn't answer why your host is in the sources list, maybe you changed /etc/chrony/chrony.conf?
Check /var/etc/chrony.d/10-uci.conf (after starting chrony) to see if the host is listed there too.
EDIT2:
the dhcp_ntp_server-directive is useful only if you receive a list of ntp server from a dhcp server.
This can be used to set different ntp server for different interfaces.
Keywords here: /etc/hotplug.d/iface/20-chrony and chrony sourcedir
No, chrony will be listening on all subnets by default but answers to allowed clients/subnets only. You can test this by commenting one allow rule and restart the daemon. The server shouldn't answer requests from that subnet anymore.
Chrony has the option to set binddevice and bindaddress but those are limited to one device/address (although i couldn't get it to work properly with binddevice).
It might be possible to run more than one chrony daemon by duplicating the init-script and changing config files, paths, (server) ports etc. for that 2nd instance but i haven't tested that.
EDIT:
connections from wan should be blocked by default with your firewall
inside your network you can adjust the firewall to prevent other subnets from accessing the server at all
Why is IP 192.168.1.1 listed as a NTP source?
This IP is not offering a NTP service on port 123:
root@eddie:~# nmap -p 123 192.168.1.1
Starting Nmap 7.80 ( https://nmap.org ) at 2022-06-19 12:25 CEST
Nmap scan report for 192.168.1.1
Host is up (0.00044s latency).
PORT STATE SERVICE
123/tcp closed ntp
MAC Address: C8:0E:14:DE:97:70 (AVM Audiovisuelles Marketing und Computersysteme GmbH)
Nmap done: 1 IP address (1 host up) scanned in 1.16 seconds
My intention is that OpenWrt router is a NTP server for any client in subnet proxy and dmz, and the NTP server IP is announced via DHCP to the relevant clients in these subnets.
nts isn't working with default chrony package. you'll need chrony-nts package and a special configuration for it. If you don't use nts, remove these 3 lines.