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I solved this issue by removing a rule I had previously set up on the rule set that I had forgotten about.
this.$set(rule, "tzid", "UTC");
According to this issue:
https://github.com/jakubroztocil/rrule/issues/440
"It’s only adding the Z if a tzid is not specified"
After explicitly removing the UTC tzid it’s generating the RRule string as expected.
Source:stackexchange.com