Hi just wondering if these sort of animated UV's are how people make lava/water effects on models?
I am certain it is so. I don't remember where I saw something like that but I surely did. I think people used techniques like this during the Collab of the Spice vendor house. Maybe you can check that whole thing out and see a thing or two:
Yes! in collab 2021 the water in the stream flowed using UVs.
Check this thread, collab2021-wip_procyonlotor ,the end of page 1 and page 2 is about creating water flow using the UVs.