I saw a similar forum from 10ish years ago on this, so decided to start a new one to get some help with my issues.

I am using an arduino UNO, universal gcode sender and GRBL to drive a two axis machine. I have edited the config.h file to remove the Z axis from homing sequence, so it now reads;
#define HOMING_CYCLE_0 (1<<X_AXIS)
#define HOMING_CYCLE_1 (1<<Y_AXIS)

I am having some issues with my limit switches and homing cycle, however outside of this things are working well. I am using 1/8 microsteps, and my machine is calibrated to the correct steps/mm and I have adjusted speeds and accelerations to suitable levels. When I jog or provide commands like "G0 X100" in G91 it all works well, except for my limit switches and homing.

I thought that I had wired my limit switches as NO, however when I have $5 = 0, the machine will move about 5mm before giving the error:

An error was detected while sending '$H': ALARM: Homing fail. Streaming has been paused.
Error while processing response : An unexpected command was completed by the controller.

However when I have $5 = 1 or $5 = 2 the machine will move at the homing rate in the correct homing direction, but when it hits the limit switches will not stop.

I think at this point it's fairly obvious my limits are not right, but I am not sure of the issue and have attached images of the setup. I think this is the case because 1. when normally streaming, if I hold down one of the limits the machine won't shut off and 2. when in the setup wizard and I hold down the limits it won't register anything. How could I test my limit switches? And what is the reason for the strange behaviour with no motion for $5 = 0 but movement for $5 = 1?
On another forum, I saw that maybe this is an issue with the controller because when finished for the day I haven't shut down and disconnected in properly, I would appreciate your thoughts :)

Thanks for your time and advice, apologies for the long read I just wanted to make sure I included all info.