You won't see an attribute 3 sent as that would be rfc 1994 chap (not ms-chap). MS-chap 'stuff' is usually sent as attribute 26:
00:19:31: Attribute 4 6 AC127C9F
00:19:31: Attribute 5 6 00000001
00:19:31: Attribute 61 6 00000005
00:19:31: Attribute 1 7 63697363
00:19:31: Attribute 26 16 000001370B0A868C
00:19:31: Attribute 26 58 0000013701340701
00:19:31: Attribute 6 6 00000002
00:19:31: Attribute 7 6 00000001
It's likely that the router is working normally but that your RADIUS server doesn't support ms-chap or is misconfigured.