Server Time Keeps Changing to 2 Hours in the Future

We have a Windows server that is part of a domain. The server's time keeps changing to two hours in the future. We have a large domain with many other servers that are not having issues.

I have unregistered w32time and re-registered it.

Edit: This is a Virtual Machine (VMware) and Host Time Synchronization is not enabled.

w32tm Configuration output:

>w32tm /query /configuration    
[Configuration]

EventLogFlags: 2 (Policy)
AnnounceFlags: 10 (Policy)
TimeJumpAuditOffset: 28800 (Local)
MinPollInterval: 6 (Policy)
MaxPollInterval: 10 (Policy)
MaxNegPhaseCorrection: 172800 (Policy)
MaxPosPhaseCorrection: 172800 (Policy)
MaxAllowedPhaseOffset: 300 (Policy)

FrequencyCorrectRate: 4 (Policy)
PollAdjustFactor: 5 (Policy)
LargePhaseOffset: 50000000 (Policy)
SpikeWatchPeriod: 900 (Policy)
LocalClockDispersion: 10 (Policy)
HoldPeriod: 5 (Policy)
PhaseCorrectRate: 1 (Policy)
UpdateInterval: 100 (Policy)

FileLogName: c:\W32Time\w32time.log (Local)
FileLogEntries: 0-116 (Local)
FileLogSize: 10000000 (Local)

[TimeProviders]

NtpClient (Local)
DllName: C:\Windows\system32\w32time.DLL (Local)
Enabled: 1 (Local)
InputProvider: 1 (Local)
CrossSiteSyncFlags: 2 (Local)
AllowNonstandardModeCombinations: 1 (Local)
ResolvePeerBackoffMinutes: 15 (Local)
ResolvePeerBackoffMaxTimes: 7 (Local)
CompatibilityFlags: 2147483648 (Local)
EventLogFlags: 1 (Local)
LargeSampleSkew: 3 (Local)
SpecialPollInterval: 3600 (Local)
Type: NT5DS (Local)

VMICTimeProvider (Local)
DllName: C:\Windows\System32\vmictimeprovider.dll (Local)
Enabled: 1 (Local)
InputProvider: 1 (Local)
NtpServer (Local)
DllName: C:\Windows\system32\w32time.DLL (Local)
Enabled: 0 (Local)
InputProvider: 0 (Local)

W32tm status output:

>w32tm /query /status
Leap Indicator: 0(no warning)
Stratum: 3 (secondary reference - syncd by (S)NTP)
Precision: -6 (15.625ms per tick)
Root Delay: 0.0625000s
Root Dispersion: 10.6023893s
ReferenceId: 0xAC14020F (source IP:  {DCIP})
Last Successful Sync Time: 12/22/2020 10:13:04 AM
Source: {DCFQDN}
Poll Interval: 10 (1024s)

I have w32tm in debug see below sample from when the time changes (Correct time: 1120 | Incorrect time: 1320):

153392 11:20:30.8918806s - Response received from domain controller {DCFQDN} authenticated successfully (using signature format)
153392 11:20:30.8918806s - Peer poll: Max:512.0000000s Cur:512.0000000s
153392 11:20:30.8918806s - Response from peer {DCFQDN} (ntp.d|0.0.0.0:123->{DCIP}:123), ofs: +00.0053219s
153392 11:20:30.8918806s - 5 Age:5 Ofs:-00.0066489s Dly:+00.0312500s RDly:+00.0312500s Dsp:00.0460656s RDsp:10.3358612s Pnt:00.0592612s Dst:00.1209518s FDsp:00.0059854s
153392 11:20:30.8918806s - 4 Age:4 Ofs:-00.0066170s Dly:+00.0312500s RDly:+00.0312500s Dsp:00.0431025s RDsp:10.3388214s Pnt:00.0474088s Dst:00.1061363s FDsp:00.0089621s
153392 11:20:30.8918806s - 3 Age:3 Ofs:+00.0038519s Dly:+00.0312500s RDly:+00.0312500s Dsp:00.0401395s RDsp:10.3417969s Pnt:00.0355568s Dst:00.0913213s FDsp:00.0052160s
153392 11:20:30.8918806s - 2 Age:2 Ofs:-00.0013745s Dly:+00.0312500s RDly:+00.0312500s Dsp:00.0371764s RDsp:10.3447571s Pnt:00.0237044s Dst:00.0765058s FDsp:00.0059562s
153392 11:20:30.8918806s - 1 Age:1 Ofs:+00.0038788s Dly:+00.0312500s RDly:+00.0312500s Dsp:00.0342134s RDsp:10.3488922s Pnt:00.0118524s Dst:00.0616908s FDsp:00.0036996s
153392 11:20:30.8918806s - 0 Age:0 Ofs:+00.0053219s Dly:+00.0312500s RDly:+00.0312500s Dsp:00.0312503s RDsp:10.3518524s Pnt:00.0000000s Dst:00.0468753s FDsp:00.0018498s
153392 11:20:30.8918806s - W32TmServiceMain: resync req, irreg now pending.
153392 11:20:30.8918806s - W32TmServiceMain: waiting i0.000s (271.972s)
153392 11:20:30.9122869s - W32TmServiceMain: timeout
153392 11:20:30.9122869s - Sample Prepared at 132531096309122869 for peer {DCFQDN} (ntp.d|0.0.0.0:123->{DCIP}:123)
153392 11:20:30.9122869s - NtpClient returned 1 samples.
153392 11:20:30.9122869s - Sample 0 offset:+00.0053219s delay:+00.0625000s dispersion:10.3849527s
153392 11:20:30.9122869s - Intersection successful with 0 dropped samples.
153392 11:20:30.9122869s -   0: Sample:0 SyncDist:424162027 SelectDisp:0
153392 11:20:30.9122869s - Sample 0 chosen. Select Dispersion:00.0000000s STC:62007474
153392 11:20:30.9122869s - ClockDispln Update: SO:53219 KPhO:47 PhO:53172 uT:16384 FllPPE:53172 PllPPE:53172 FllPPrE:38783.2 PllPPrE:38783.2 sysPollTicks:32767 FllDown:65534 PllUp:16384 PllDown:262136 FllRA:0 PllRA:0 RA:0 CR:156253 nT:2 RAPhO:0 SD:103810627 (i) LI:0 S:3 RDl:625000 RDs:103949527 TSF:0x8 Sync
153392 11:20:30.9128159s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:532 CR:156253 PhCR:532 UI:100 phcT:31 KPhO:53219
153392 11:20:30.9128159s - W32TmServiceMain: waiting 271.951s
153392 11:20:31.9227747s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:191 CR:156253 PhCR:191 UI:100 phcT:64 KPhO:19171
153392 11:20:32.9240287s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:69 CR:156253 PhCR:69 UI:100 phcT:64 KPhO:6947
153392 11:20:33.9401284s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:24 CR:156253 PhCR:24 UI:100 phcT:65 KPhO:2462
153392 11:20:34.9403116s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:9 CR:156253 PhCR:9 UI:100 phcT:64 KPhO:926
153392 11:20:35.9403735s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:3 CR:156253 PhCR:3 UI:100 phcT:64 KPhO:350
153392 11:20:36.9404462s - ClockDispln Discipline: *SKEW*TIME* - PhCRR:1 CR:156253 PhCR:1 UI:100 phcT:64 KPhO:158
153392 13:20:30.1266146s - W32TmServiceMain: timeout
153392 13:20:30.1266146s - Sample Prepared at 132531168301266146 for peer {DCFQDN} (ntp.d|0.0.0.0:123->{DCIP}:123)
153392 13:20:30.1266146s - NtpClient returned 1 samples.
153392 13:20:30.1266146s - Sample 0 offset:+00.0053219s delay:+00.0625000s dispersion:10.4682769s
153392 13:20:30.1266146s - Intersection successful with 0 dropped samples.
153392 13:20:30.1266146s -   0: Sample:0 SyncDist:424995269 SelectDisp:0
153392 13:20:30.1266146s - Sample 0 chosen. Select Dispersion:00.0000000s STC:62007474
153392 13:20:30.1266146s - ClockDispln Update: *STALE*(NextSTC=62007474 <= LastUTC=62007474) Sync
153392 13:20:30.1266146s - W32TmServiceMain: waiting 512.000s
153392 13:24:30.1629465s - PeerPollingThread: WaitTimeout
153392 13:24:30.1629465s - Polling peer {DCFQDN} (ntp.d|0.0.0.0:123->{DCIP}:123)

Are you sure this machine is listed as belonging to the correct time zone, and not in a time zone 2 hours ahead?