Hi.
in our game i have a empty object in front of the AI character, this character is set as a child to the sprite renderer (which is not set as root, my root has a rigidbody2d and a collider for floor collision)
the empty object i use for raycast source position.
i use set rotation and set the Y rotation 0 / 180
So it looks similar to your setup.
but my raycast point is just above the ground (and doing a raycast downwards and one forward (for checking walls)
and while writing this i noticed that you raycast 'Space' is set to 'World' maybe that's the issue.
it should probably be 'Self'
I also noticed you are setting positive/negative velocity.
There is an action called Set Forward Velocity 2D on the
Ecosystem