Maybe the game has some joystick-type input enabled for some reason.
Try disabling the respective entry in the dosbox config file as well as in
the game's options if that's available.

I've encountered something similar with this game. On my i7 if I don't get the cycles just right the menus will spin like that and in the game the characters will also make random movements.

I found that if I set the cycles low enough this problem goes away, however I had to play it in low rez mode to get a setting that was playable and also didn't cause that weird navigation problem.

Anyways don't know if its the same thing but try lowering your cycles before playing it. To see if it is this problem set the cycles to like 60,000 for a test...thats off the top of my head but that might be right. If you still see the problem keep lowering the cycles by a few thousand, but I don't think it should be much lower than that.

There are no Joystick settings that I can find, I thought this problem must occur for everyone...

Was originally set to "auto" cycles.

Set it to 50000 cycles on my old dual core celeron 1.6 ghz and it works perfectly.

Cool glad that worked for you. Don't know if it's an issue with machine speed and it would happen in a pure DOS environment or if it's an issue in DOSbox only. The fastest box I have with DOS is a P90 which isn't really that fast for this game.

Does anyone out there have a faster DOS machine to test an see if this occurs in a pure DOS environment?