So I have noticed recently, that when I go to a game's store page, under the People Who Bought It Also Bought section at least for me some of the games that I have purchased in the past are not showing as owned and grayed out. However they are showing in my Game Library. Is anyone else experiencing this?

Some games have more than one store page. A recent example would be Battletech. There is the regular version. If you have that version, you can buy the Digital Deluxe Content DLC. Battletech also has a Digital Deluxe Edition, that already comes with all the Digital Deluxe content. These are both the same game, but both versions show up separately in the store. Its possible to buy them both, even though its redundant. Maybe this is whats going on with your recommendations.

(never mind)

Yep, it does that for me, too.

The first five games it shows is always correctly cross-referenced with both my game library and wishlist. That means it indicates which of those five games that I own or have wishlisted.

Clicking the show more button shows five more games, but they apparently aren't cross-referenced with my game library or wishlist. The additional games do not have those indicators when I own or have wishlisted them.

Seems to me it used to work a long time ago. But for a long time now it hasn't. For me, only the first five games that are initially loaded are cross-referenced with my game library and wishlist.

I have been here for like 10 years, and I never realized there was a "More Recommendations" button.

Yeah it's on the right bottom side of a game's store page haha. It's called People Who Bought This Also Bought.