Process Synchronization: Dekker's algorithm
When P1 runs again, it set its flag to True. Your scenario assumes P0 is executed continuously, while P1 never gets a chance to execute its code. This also happens in the simple case where there is only one process running, but obviously this does not contradict bounded waiting.

An implicit assumption when talking about protocols for mutual exclusion is that all of the processes involved will eventually run and execute their current command (otherwise it is meaningless to talk about properties such as bounded waiting or starvation freedom).