A data point, obtained from a build of the time zone package as distributed:
Script started on 2024-12-08 22:23:57+00:00 [TERM="xterm-256color" TTY="/dev/tty1" COLUMNS="82" LINES="30"]
$ export TZ=America/New_York
$ ./date
Sun Dec 8 17:24:32 EST 2024
$ export TZ=Etc/Unknown
$ ./date
Sun Dec 8 22:24:55 UTC 2024
$ exit
exit
Script done on 2024-12-08 22:24:57+00:00 [COMMAND_EXIT_CODE="0"]
I could make an argument for: with TZ set to Etc/Unknown (or any other unfathomable value), some obnoxiously wrong results are best seen; a time zone abbreviation of ERR has been suggested as a possibility in the past.
Side note, brought to mind by /etc/tty and /dev/tty: if TZ is "-", should the time zone information be read from the standard input? :-)