"So you're saying 10 monster of different types is impossible for a group of goblins, but 10 monsters of the same type is a standard encounter?"
I see the confusion. That group of 10 monsters you referenced isn't a 'standard encounter': they are a death sentence for that village. I seen that goblins take out one or two that they managed to ambush, but taking the group head-on would likely be disasterous. This is the case in many of our adventures: the goblins are small creatures in a perilous world. There is no expectation that they can take on every threat they run into.
"So what I'm understanding from your answers is that each encounter only has one monster block regardless of the number or types of monsters? We just add more armor or moves to that monster block to get that feeling?"
Yes, exactly.
"Only one twist? Doesn't that make armor pointless or discourage goblins from coming up with their own twist?"
Leather Armor can only be damaged once before it needs to be repaired. It's really useful, but it works once and then you need to think of something else. Also, armor takes up precious inventory and it isn't relevant to all situations.
"Monster armor and moves are basically the same thing, just one is more flavorable than the other? "
Yeah, that's a reasonable way to put it. However, since armor is crossed out first, monsters with armor are likely to stay in a fight longer than a moster with highly specific moves (who will flee as soon as they are out of moves that make sense in the context".
"Finally, how do you narrate the monsters dying or running off? If you have 10 clerics with 3 moves, that would give them 2 armor for being in a group and outnumbering the goblins. The goblins hit one, reducing their armor by 1 and I'm assuming killing one of the clerics? The problem being that there are 10 clerics and only 5 (3 moves 2 armor) things to cross off. If the narration says they killed 5 clerics over the course of 5 actions, then that would cross off all 5 boxes and leave 5 clerics still alive. I can't just have them run off and escape, the players would chase them down. So how does this work in this game?"
When the clerics are out of moves that make sense in the present context, they flee. When they are out of moves, they are dead. This is more cinematic in its pacing; the GM might say "Their spirit is broken and you cut them down without further difficulty. On their bodies you find..."