FRiC is correct. 700c and 29" tires share the same rim diameter, but mountain bike tires are fatter and taller than road tires (broadly speaking). The larger circumference of a mountain bike tire means it will roll farther than a road bike tire for every pedal revolution. This is what’s throwing off your speed numbers in-game.
At this time, the fattest tire option available to select when using a classic wheel-on trainer is 700 x 38c which is more typical IRL for a gravel bike. We recognize the desire to broaden those selections for Zwifters riding bikes with even fatter tires, and we’re having internal conversations to make those available in future game updates.
In the meantime, we recommend you select the largest available 700c tire size. In a workout, you can tweak the FTP bias +/- 10% to further bring the game experience closer to what it’d be in the real world.
Thank you for letting us know where to up our game! We appreciate your feedback.