I've got two systems that are set the same way with the same outcome.

I selected frequency=weekly, checked only Sunday, set Every X Weeks to Every 2 Weeks and set the start time and date.

I would have it expected it to run on Sunday every 2 weeks, but my backup history shows a full backup every week on Sunday.

Am I misunderstanding how this option works?  I suppose it doesn't make sense, if I checked Wed and Sun, and then put every 4 weeks, what would it do?

Your understanding is correct.  If you set a backup to run on Sunday every 2 weeks, it should only run every other week.  If you set it to 4 weeks, it will run (approximately) once per month.  But there have certainly been cases of Windows Task Scheduler firing tasks at the wrong times.  I myself had an issue where I had a Full backup set to run once per month, and I got the backup as expected, but it ALSO ran that job on the day BEFORE the desired day, so I ended up with extra Full backups an early purging of older backups.  Schedules have also been found to behave erratically after transitions to or from DST.

Starting with Reflect 7.3, Macrium introduced their own internal scheduler as an alternative to Windows Task Scheduler, which is meant to resolve issues like this.  If you haven't already switched your tasks over, you may wish to consider doing that unless you specifically need to use Windows Task Scheduler for some reason.  To check this, go to Other Tasks > Edit Defaults > Schedule.  If you switch schedulers, your existing schedules will be converted automatically.

If you're still seeing unexpected behavior, try deleting the misbehaving schedule entry, clicking Finish in the backup job wizard so that the changes are applied to the underlying scheduler, and then recreating the schedule entry.  Then you can check the Scheduled Backups tab for the Next Run Date to see if that's as expected, including after the initial run of that job by which point the Next Run Date should show as 2 weeks later.  (That said, I will note that when I was dealing with the issue I described above, Windows always showed the correct Next Run Date and yet it actually ran the task a day early.  Switching to Macrium's scheduler resolved that.)