Yes, this is by design. Marketing Cloud's email app uses a Subscriber model; it will send to the email address defined in the Subscriber record.
The only solution that I'm aware of is the somewhat awkward method of exporting the DE, then re-importing it using an Import Activity.
Refer to the procedural steps documented in this answer: How to Query a Data Extension and Update the Subscriber list at the Child Business Unit Level?How to Query a Data Extension and Update the Subscriber list at the Child Business Unit Level?