You have set the workflow to run on creation and update. This is what happens in succession:
- You create a new item
- The workflow is fired the first time (Create)
- The Version is updated (as it would have, had the item been actually modified)
- The workflow is started again (Modify)
You would have to modify your workflow to avoid that. One way to do it is to get the time between the 'Created' and 'Modified' fields of the item in Designer, and only allow the workflow logic to execute, if the time is more than a specific amount, to ensure that the item is actually being modified by a user and not by the workflow inflicted version increment. 2 workflows: one to run on creation and one to run on modify would make more sense in this scenario, where the aforementioned condition would only be added to the 'Modify' workflow.