My understanding is basically that OPEC is similar to a workers union. Countries band together and set terms that dictate the price and the supply available in the market.

UAE leaving OPEC is like breaking up a workers union. UAE is no longer required to restrict how much oil it exports, and also doesn't have to set a price floor. They're allowed to sell more oil cheaper, potentially at the expense of neighboring OPEC countries.

Which to me sounds like a good thing for the rest of the world?

The basics are the same as any other cartel. OPEC states cover enough of the supply-side of the market to be able to keep prices artificially high.

UAE leaving means UAE can price below OPEC's target and take more of the market. OPEC will have to react and lower prices or concede some of the market.

Does any of this matter if the major players can't ship oil through Hormuz? Who knows...

OPEC is a cartel of Arab oil-producing countries, including UAE. They limit production in order to keep the world oil price artificially high. UAE is pulling out of the cartel, presumably so it can bypass the restrictions and cash in on the high prices caused by the Iranian conflict. AFAIK this is the first time a country has pulled out of OPEC, and hopefully, it will lead to its demise.

The very short explanation is that they kind of want to be not-Saud and has trouble cooperating with Saudi Arabia for a rather long time, not just over fossil fuels but also in Yemen.

Recently the UAE faction in Yemen was forcefully reined in by the house of Saud, and OPEC kind of prioritises different things than the UAE, i.e. not pushing profits hard in the short to medium term instead focusing on stability and predictability.

Currently the saudis are trying to resolve the Hormuz issue and the attack on Iran through diplomacy, which the UAE is not exactly fond of and would rather see a violent solution. In part this is coloured by the close relation between the UAE and Israel, both of which share the view that running militant factions in failed states is preferable to orderly international relations between sovereigns. The saudis aren't as keen on this type of foreign policy and in other aspects also not as friendly with Israel as the UAE.

The UAE has been signaling that they don't really want to be a part of OPEC since at least 2020 or so. Them actually leaving was to be expected, the question should have been 'when' rather than 'if'. Iranian retaliations on the UAE and subsequent damage to the reputation of mainly Dubai and Abu Dhabi as well as capital flight probably strengthened the UAE politicians longing to get out of OPEC and start pumping and selling at full capacity to try and make as much money as possible as fast as possible.

If the UAE does not do this it'll be more exposed to credit and currencies besides the US dollar, which they probably find rather inconvenient.

The goal is a full regional war orchestrated by Israel. That's what is playing out here.

Slowly weakening remaining Arab states and setting them up to fight each other.