I just noticed in version 5 (noticed first in 5.0.3, but still in 5.0.5) that you can use any photo in the gallery section and make it your profile photo, even though it’s not your photo. Is that by design or a bug?

I think it's by design. You can always download a copy of the image and upload it as a profile photo.

It would be pointless to restrict the option on other images. 🤷‍♂️

This is currently by design that you can do this and has been this way for some time.

Ok. Wish there was to disable it though. Just starting to use the Gallery, and not a big fan that someone can easily use someone else’s photos for their own profile photos.

As terabyte mentions above, removing the ability to use one from the gallery doesn't stop it being easy to use someone elses photo for your own. If you wanted to use one, you'd just download it. In all honesty, if they didn't know to do that, its very likely they wouldn't work out how to set it from the gallery either.