Correct. With staves now being versatile, a Land Druid can now use a shield while wielding a staff that entangles or some other special effect and have 17 AC (higher than any Wild Shape) without having to use a L2 spell slot (for Barkskin) and with Shillelagh deals 1d8+4 (if 18 WIS) which is good enough damage to compete with most of the available Moon Druid forms.
The Polar Bear does 2d4+2, so it's marginally better but costs a Wild Shape charge and potentially a Barkskin spell slot to be less effective overall. The Land Druid can still cast spells and do other things for almost no penalties.
It doesn't make any sense. I thought at Level 5 the Larian version of Moon Druid would get access to Halsin's Bear, the one that has multiattack.
So much this. But many people don't seem to understand. I get it. We have multiple health bars... but your HP in wildshaped is already balanced out by the terrible AC of your wildshape form. The current polar bear is lucky to survive a single turn in the midst of enemy targets. But hey, at least I got that 6-12 damage off right?
Honestly, I'd prefer a better bear form at level 4. Getting it at 5 for just a single level before better forms at 6 would be weird. I'd even keep the nerfed attack roll that our polar bear has (2d4+4, in 5e its 2d6+4).
In its current state though, a moon druids wildshaping (which is its identity) doesn't really improve from level 2. It just... stays the same. It's very sad.