Let me explain this to you as simply as I can.
The moon affects the entire mass of the earth and its rotation.
It does. The issue is that because the oceans are both fluid and massive, friction of the tides is almost entirely responsible for the slowing of the Earth' rotation. The tides of the atmosphere are also fluid, but they have so little mass that it doesn't do much. Likewise, the rock of the Earth is quite massive, but so inflexible that it doesn't affect the rotation much, either.
It does that by attracting the nearside tidal bulge that is generated almost entirely by the earth's abundant liquid water. This attraction slows the near side tidal bulge on the earth more than the far side bulge is accelerated providing a net brake force applied to the earth's rotation. This effect would play out regardless of the degree of internal friction experienced on earth. Thus the friction generated is irrelevant when considering the earth's slowing rotation.
Similarly the friction generated is irrelevant when considering the recession rate of the moon. The only factor that is relevant is the size of the tidal bulge.
I understand you want us to believe that. You might even believe it yourself. But there is that problem of physics. The forces generated by the movement of the Earth under the tidal bulge, draw energy from the Earth's rotation, slowing it.
C'mon Stipe, you've come a long way from your original belief here; just go a bit further, and you're home. Remember your example of the person standing on the deck of a sailboat, blowing on the sail?
It won't work because of the friction of that person's feet on the deck. You can't get a torque like that without friction. And that what the torque on the Earth is. The Earth moves under the tidal bulge, and the friction from that movement is the energy lost by the Earth and gained by the Moon.
Think.