Resistor in parallel to circuit is causing VREG to output higher voltage
R7 is pulling that input line towards 12 volts and, via the ATTINY's input protection diodes, is pulling the 5 volt line up.  A 5 volt linear voltage regulator will pull its output up to 5 volts, but cannot pull the output down if something else trys to pull the output up.

You should probably connect R7 to Ground, rather than +12.  However, not knowing what sort of circuit is feeding GND_PWM_IN, I can't say for sure it that will work - at least it won't continue to risk damaging the ATTINY, and anything else using that 5 volts.

If GND_PWM_IN is a 12 volt signal, you will need a voltage divider or level shifter to reduce the signal to the  5 volt maximum that the ATTINY can tolerate.