Oh good god, I was thinking of an entirely different radio.
Okay, on my D74 if I turn the knob in memory mode it will keep on going through the all of the memories going up or down depending on the direction I turn it. Also, while in the "Menu", it will continue to cycle through all of the options depending on the direction. At this point I agree that something is definitely wrong with your D74.
* Alternatively, instead of using the dial, I typically use the rocker switch with the arrows, but your problem still exists *
I gave a quick glance to the manuals and I did not find something that would make the "[ENC] control" dial perform the way it is on your unit. Perhaps backing up your data to a MicroSD card and resetting your radio may fix the issue. Check your radio to see if the dial works immediately after the reset. If it does then re-install your memories and settings and then check the dial again. That is what I would try.
Actually, after you backup your data I recommend checking to see if you have the latest firmware as well, or at least 1.10 which is what I am using and everything is working fine. Also make sure your battery is charged up well enough. Radios can act wonky with very low batteries.
My th-d74 knob enc turns fine and is tight, but it only cycles back and forth in any direction. Any way to fix this? clues? No matter how many clicks I do one direction or another, it just cycles back and forth in any menu.