I have the same issue going on. I have a command that functions perfectly within macOS to change the timezone, but when I run it through MDS it doesn’t make the change despite stating it ended successfully. I’ve tried running it through MDS, creating a flat package, and running it as a postinstall script - and nothing changes. But again, it works flawlessly when executed within macOS and through the Terminal.
Perhaps this will help you as a workaround until a solution can be found? If you use the -listtimezones argument instead, it will display a list of all the timezones that can be set.
sudo systemsetup -settimezone America/New_York