Why is my Latex text changing justification by itself?

The reason you get the second half of your text justified is that you don't have an empty line between the end of your text and \end{raggedright}:

 quasi aliquam eligendi, placeat qui corporis!
 \end{raggedright}

For latex, this means that you switch back to justified text before the paragraph is finished and thus the whole paragraph gets justified. And because you are messing with \newline instead of having proper empty lines to delimit each paragraph, this means the whole text back until the scene change gets justified.

However instead of inserting an empty line, you shouldn't use raggedright as an environment in the first place. It kind of works by accident, but in reality \raggedright is a switch and not an environment. If you want only a part of your document to be ragged right, you can use a group around it (just make sure that again, there is an empty line before the group ends)

(and have a look at your log file, many of the class options you use are deprecated and should be replaced by the currently supported methods. Also using the geometry package with a koma script class is not necessarily such a good idea...)

%
% Body text font is Palatino!
%

% I copied the setting as is.

\documentclass[a5paper,pagesize,10pt,bibtotoc,pointlessnumbers,
normalheadings,DIV=9,twoside=false]{scrbook}

% twoside, openright
\KOMAoptions{DIV=last}

\usepackage{trajan}
 
\usepackage[english]{babel}
\usepackage[utf8]{inputenc}
\usepackage[T1]{fontenc}

\usepackage[sc]{mathpazo}
\linespread{1.05} 

\usepackage{verbatim} % for comments
\usepackage{listings} % for comments

% Margin
\usepackage{geometry}
\geometry{hmargin=1.5cm,vmargin=3cm}

%-------------------------%
%------Document Code------%
%-------------------------%
\newcommand{\thought}[1]{\textit{#1}}


% !!! This two commands seem to create the problem

\newcommand{\scenechange}{
  \par
  \vspace{\baselineskip}
  \par
\noindent}
%Creates a line break for a change of scene

\newcommand{\majorchange}{
  \par
  \vspace{\baselineskip}
  \hfill
  \textasteriskcentered
  \hspace{0.2em}
  \textasteriskcentered
  \hspace{0.2em}
  \textasteriskcentered
  \hfill
  \vspace{\baselineskip}
  \newline
\noindent}
%creates a major line break, split by an asterisk for scene changes at the end of a page of where a sense of a major change is required. 

%-------------------------%
%------Main Document------%
%-------------------------%
\title{Book}   
\author{Svartorm} 
\date{2022} 

\begin{document}

\maketitle

\newpage
\section*{Testing Section}
\begingroup
\raggedright
Lorem ipsum dolor sit amet consectetur adipisicing elit.

Maxime mollitia,
molestiae quas vel sint commodi repudiandae consequuntur voluptatum laborum
numquam blanditiis harum quisquam eius sed odit fugiat iusto fuga praesentium
optio, eaque rerum!

\textit{Provident similique accusantium nemo autem. Veritatis
obcaecati tenetur iure eius earum ut molestias architecto voluptate aliquam
nihil, eveniet aliquid culpa officia aut! Impedit sit sunt quaerat, odit,
tenetur error, harum nesciunt ipsum debitis quas aliquid. Reprehenderit,
quia. Quo neque error repudiandae fuga? Ipsa laudantium molestias eos 
sapiente officiis modi at sunt excepturi expedita sint? Sed quibusdam
recusandae alias error harum maxime adipisci amet laborum. Perspiciatis 
minima nesciunt dolorem! Officiis iure rerum voluptates a cumque velit 
quibusdam sed amet tempora.}

Sit laborum ab, eius fugit doloribus tenetur 
fugiat, temporibus enim commodi iusto libero magni deleniti quod quam 
consequuntur! Commodi minima excepturi repudiandae velit hic maxime
doloremque. Quaerat provident commodi consectetur veniam similique ad 
earum omnis ipsum saepe, voluptas, hic voluptates pariatur est explicabo 
fugiat, dolorum eligendi quam cupiditate excepturi mollitia maiores labore 
suscipit quas? Nulla, placeat. Voluptatem quaerat non architecto ab laudantium
modi minima sunt esse temporibus sint culpa, recusandae aliquam numquam 
totam ratione voluptas quod exercitationem fuga. Possimus quis earum veniam 
quasi aliquam eligendi, placeat qui corporis!

\scenechange % I think the problem comes from here.

Lorem ipsum dolor sit amet consectetur adipisicing elit.

Maxime mollitia,
molestiae quas vel sint commodi repudiandae consequuntur voluptatum laborum
numquam blanditiis harum quisquam eius sed odit fugiat iusto fuga praesentium
optio, eaque rerum!

\textit{Provident similique accusantium nemo autem. Veritatis
obcaecati tenetur iure eius earum ut molestias architecto voluptate aliquam
nihil, eveniet aliquid culpa officia aut! Impedit sit sunt quaerat, odit,
tenetur error, harum nesciunt ipsum debitis quas aliquid. Reprehenderit,
quia. Quo neque error repudiandae fuga? Ipsa laudantium molestias eos 
sapiente officiis modi at sunt excepturi expedita sint? Sed quibusdam
recusandae alias error harum maxime adipisci amet laborum. Perspiciatis 
minima nesciunt dolorem! Officiis iure rerum voluptates a cumque velit 
quibusdam sed amet tempora.}

Sit laborum ab, eius fugit doloribus tenetur 
fugiat, temporibus enim commodi iusto libero magni deleniti quod quam 
consequuntur! Commodi minima excepturi repudiandae velit hic maxime
doloremque. Quaerat provident commodi consectetur veniam similique ad 
earum omnis ipsum saepe, voluptas, hic voluptates pariatur est explicabo 
fugiat, dolorum eligendi quam cupiditate excepturi mollitia maiores labore 
suscipit quas? Nulla, placeat. Voluptatem quaerat non architecto ab laudantium
modi minima sunt esse temporibus sint culpa, recusandae aliquam numquam 
totam ratione voluptas quod exercitationem fuga. Possimus quis earum veniam 
quasi aliquam eligendi, placeat qui corporis!

\endgroup
\end{document}