I am making my own custom overlay for a select few items, and I found that only the scale of skulls change on Lunar client. In normal minecraft, the overlay works fine and changes all the items scales properly. I tested the overlay with a friends computer on Lunar (Windows), and it is completely fine, however I am on MacOS so a potential bug could exist there. I also have the UHC overlay Lunar mod disabled.
So basically, Lunar might be unintentionally changing/forcing some settings even with the UHC overlay mod disabled, or some other weird bug.