>So if you travelled vertically within a timezone, you could end up going back and forth by an hour repeatedly, depending on the state’s decision made here?
You already have that in EU -- Spain is observing CET (and its summer equivalent CEST) even though it is pretty much completely in the same time zone as Great Britain.
And Portugal is on GMT, so you have a bit of Spain (GMT+1) that's due north of Portugal (GMT) and borders it by land.
(and most of Portugal is west of 7.5 degrees west so "should" be GMT-1... but really in any sane time zone scheme Portugal and Spain would have the same time.)