How often do I need to replace the home water pressure regulator?
Age matters because the unit has springs inside and the springs can lose tension over time, also your seals can fail. 

All of that said - you can take the 5 years thing with a BIG grain of salt. People say the same kinds of things about torsion springs on a garage door. Usage Matters.

With a faucet open OF COURSE your water pressure is going to drop - hey you have running water - the water follows the path of least resistance - it is not running into your gauge any more - but into the drain. 

What you are seeing is normal pressure drop with an open faucet. You probably should lower your pressure a little as 85PSI is probably at the high end. 

Here is a video on adjusting the water pressure.