Why is datalength of decimal 5 regardless of precision?
DATALENGTH returns the size (in bytes) of the internal representation of the value passed to it.

It does not return the storage size required (which might depend on where you store it) nor does it return the maximum size of data that might be stored in the type.

For example (dbfiddle demo):

SELECT
    N.d, 
    AsBinary = CONVERT(varbinary(20), N.d),
    DataLengthVarBin = DATALENGTH(CONVERT(varbinary(20), N.d)),
    DataLengthDec38 = DATALENGTH(N.d) 
FROM 
(
    SELECT 
        CONVERT(
            decimal(38, 38), 
            '0.' + 
            REPLICATE('0', 38 - SV.number) + 
            REPLICATE('1', SV.number))
    FROM master.dbo.spt_values AS SV
    WHERE [SV].[type] = N'P'
    AND SV.number BETWEEN 1 AND 38
) AS N (d);


gives:


+------------------------------------------+--------------------------------------------+------------------+-----------------+
|                    d                     |                  AsBinary                  | DataLengthVarBin | DataLengthDec38 |
+------------------------------------------+--------------------------------------------+------------------+-----------------+
| 0.00000000000000000000000000000000000001 | 0x2626000101000000                         |                8 |               5 |
| 0.00000000000000000000000000000000000011 | 0x262600010B000000                         |                8 |               5 |
| 0.00000000000000000000000000000000000111 | 0x262600016F000000                         |                8 |               5 |
| 0.00000000000000000000000000000000001111 | 0x2626000157040000                         |                8 |               5 |
| 0.00000000000000000000000000000000011111 | 0x26260001672B0000                         |                8 |               5 |
| 0.00000000000000000000000000000000111111 | 0x2626000107B20100                         |                8 |               5 |
| 0.00000000000000000000000000000001111111 | 0x2626000147F41000                         |                8 |               5 |
| 0.00000000000000000000000000000011111111 | 0x26260001C78AA900                         |                8 |               5 |
| 0.00000000000000000000000000000111111111 | 0x26260001C76B9F06                         |                8 |               5 |
| 0.00000000000000000000000000001111111111 | 0x26260001C7353A42                         |                8 |               5 |
| 0.00000000000000000000000000011111111111 | 0x26260001C719469602000000                 |               12 |               9 |
| 0.00000000000000000000000000111111111111 | 0x26260001C701BDDE19000000                 |               12 |               9 |
| 0.00000000000000000000000001111111111111 | 0x26260001C71162B302010000                 |               12 |               9 |
| 0.00000000000000000000000011111111111111 | 0x26260001C7B1D4011B0A0000                 |               12 |               9 |
| 0.00000000000000000000000111111111111111 | 0x26260001C7F14E120E650000                 |               12 |               9 |
| 0.00000000000000000000001111111111111111 | 0x26260001C77115B78CF20300                 |               12 |               9 |
| 0.00000000000000000000011111111111111111 | 0x26260001C771D6267F792700                 |               12 |               9 |
| 0.00000000000000000000111111111111111111 | 0x26260001C7716084F7BE8A01                 |               12 |               9 |
| 0.00000000000000000001111111111111111111 | 0x26260001C771C42BAB756B0F                 |               12 |               9 |
| 0.00000000000000000011111111111111111111 | 0x26260001C771ACB5AF98329A                 |               12 |               9 |
| 0.00000000000000000111111111111111111111 | 0x26260001C771BC18DDF6F90506000000         |               16 |              13 |
| 0.00000000000000001111111111111111111111 | 0x26260001C7715CF7A2A4C33B3C000000         |               16 |              13 |
| 0.00000000000000011111111111111111111111 | 0x26260001C7719CA95D6EA4555A020000         |               16 |              13 |
| 0.00000000000000111111111111111111111111 | 0x26260001C7711CA0A84F6C5887170000         |               16 |              13 |
| 0.00000000000001111111111111111111111111 | 0x26260001C7711C41961C3B7449EB0000         |               16 |              13 |
| 0.00000000000011111111111111111111111111 | 0x26260001C7711C8BDE1D4F8ADE300900         |               16 |              13 |
| 0.00000000000111111111111111111111111111 | 0x26260001C7711C6FB12A1767B1E85B00         |               16 |              13 |
| 0.00000000001111111111111111111111111111 | 0x26260001C7711C57EEAAE706EE169703         |               16 |              13 |
| 0.00000000011111111111111111111111111111 | 0x26260001C7711C674FAD0C454CE5E623         |               16 |              13 |
| 0.00000000111111111111111111111111111111 | 0x26260001C7711C071AC57EB2FAF4046701000000 |               20 |              17 |
| 0.00000001111111111111111111111111111111 | 0x26260001C7711C4704B3F3F8CA9131060E000000 |               20 |              17 |
| 0.00000011111111111111111111111111111111 | 0x26260001C7711CC72AFE84B9EDB1EF3D8C000000 |               20 |              17 |
| 0.00000111111111111111111111111111111111 | 0x26260001C7711CC7ABED313F49F35C6B7A050000 |               20 |              17 |
| 0.00001111111111111111111111111111111111 | 0x26260001C7711CC7B548F377DC80A131C8360000 |               20 |              17 |
| 0.00011111111111111111111111111111111111 | 0x26260001C7711CC719D780AF9C084FF0D1230200 |               20 |              17 |
| 0.00111111111111111111111111111111111111 | 0x26260001C7711CC7016708DB1E56166333661500 |               20 |              17 |
| 0.01111111111111111111111111111111111111 | 0x26260001C7711CC71106548E345DDFDE01FED500 |               20 |              17 |
| 0.11111111111111111111111111111111111111 | 0x26260001C7711CC7B13C488F0DA4B9B412EC5B08 |               20 |              17 |
+------------------------------------------+--------------------------------------------+------------------+-----------------+