That's the way the built-in "Text along path" function works. It computes new positions for each control point individually. The distortion becomes visible if the characters are not small relative to the curve radius. But a nice consequence is that the letters don't overlap (in you image, without distortion the final 'ES' would likely overlap.
There is my ofn-text-along-path script with works on a character basis, so characters are not distorted.
A different way to distort paths is to use my ofn-bend-path script:
There is my ofn-text-along-path script with works on a character basis, so characters are not distorted.
A different way to distort paths is to use my ofn-bend-path script: