It would seem that the router is simply not capable of handling multiple simultaneous connection attempts.
I have tested this as well with 8 client devices, and in my case, it took 35 seconds until every device received an IP. The logs indicate that several devices were disconnected and had to reconnect within the first 20 seconds.
Also, from the logs, each received DHCP discover packet was followed with a DHCP offer response, indicating that dnsmasq service, responsible for router's DHCP server, is functioning properly. However, the fact that there were numerous recurring DHCP discover packets coming from the same client devices would indicate that their distribution over wireless medium was not successful, bringing back to physical limitations of the router.
I redid this same experiment with RUT955, and it took almost twice less time to provide IP leases, which, considering that the device has two WiFi channels and supports 2x2 MIMO, seems to support the radio link issue.
Best regards,