Why does UFCS seem to require that functions be defined in a
higher (global being the highest) scope than themselves while the
normal function syntax works fine?

This is OK:
int fun1(int n) {
	return n + 1;
}

int fun2(int n) {
	return n.fun1;
}

This is also OK:
int fun3(int n) {
	int fun4(int n) {
		return n + 1;
	}

	return fun4(n);
}

This is not OK:
int fun5(int n) {
	int fun6(int n) {
		return n + 1;
	}

	return n.fun6;
}

ixid:

> This is not OK:
> int fun5(int n) {
> 	int fun6(int n) {
> 		return n + 1;
> 	}
>
> 	return n.fun6;
> }

Unfortunately this is by design, and at the moment it's unlikely to change. And I think it's done this way to avoid troubles with code in class methods.

Bye,
bearophile