Getting bizarre results with 12V LED driver power supply
It's likely a constant voltage supply, but it's probably cheap and badly filtered. Issues with sensors typically result from too much switching or ac noise. A multimeter won't see those fluctuations, you'd be able to see them with an oscilloscope. Adding bypass capacitors or even larger 1000uF capacitors to help filter the DC side of the line could help.
Alternatively, it could be that your load is too small for the supply to regulate properly. You normally want your load to be between 10 and 90 percent of the supply's rating. At 8.5 Amps, anything less than 850 mA may cause issues. The RPi brings down the 5V to 3.3V internally and could be filtering out any noise but your sensor may not.