What is the best approach for increasing FTP for zone 2, endurance, non-race rider?

Solid advice already above.

Just a separate interpretation. I don’t think the way you use the ramp test shows an accurate estimate of increases in terms of FTP( looking at the figure above, within every week).

What you’re actually doing is you train to test better. Of course, by gathering more experience and the feeling for holding high power during the test, you then test better next time.

But your physiology underlying FTP, unfortunately, hasn’t changed much. These adaptations take significantly longer.

You crash (“loose all FTP gains”) once you’ve build so much fatigue that you don’t do well anymore in the ramp test.
True physiological adaptations that translate to FTP gains don’t dissolve in a week.

As noted above, rest week doesn’t mean you need to be off the bike/doing no sports so that’s got your T1D covered.