My guess is because the time scale is different, not just the hour offset. “Seconds tick faster than earth” — this would imply that if using UTC, the moon would move from one offset to another, then another and so on over time.

My understanding is that's exactly the point. To make clocks on the Moon be synchronized with UTC and not drift over time. You can only do that by making the clocks physically tick at different rate. This is because of relativity - time itself on the Moon passes at slightly different rate than on Earth, so if your clock is precise enough, you need to compensate for it. Just like GPS satellites need to compensate for being in slightly lower gravity and going fast relative to stationary clocks on Earth's surface. This isn't any kind of illusion, this is how the universe really works. If you've seen the movie Interstellar, it's basically the same effect they experienced on the planet orbiting a black hole, just a much less extreme case.

other people have given good answers to this question but i think it’s worth saying that this isn’t a dumb question. it took a lot of smart people and thousands of years to figure out that time passes at different speeds in different parts of the universe. it’s not intuitive at all.