MOA/Minute of Angle is 1.047 inches per 100 yards.
As far as I can tell the scope adjustment is doing what it is supposed to do.
A lot of people when discussing MOA use what is called "Shooter's MOA" which rounds down MOA to 1" per 100 yards:
1 MOA= 1" @ 100, 1 MOA=3" at 300 yards, 1 MOA=5" at 500 yards, 1 MOA=10" at 1000 yards, etc.