Two-dimensional (2D) transition metal dichalcogenides (TMDCs) have been the subject of sustained research interest due to their extraordinary electronic and optical properties. They also exhibit a wide range of structural phases because of the different orientations that the atoms can have within a single layer, or due to the ways that different layers can stack. Here we report the first study of direct-visualization of structural transformations in atomically-thin layers under highly non-equilibrium thermodynamic conditions. We probe these transformations at the atomic scale using real-time, aberration corrected scanning transmission electron microscopy and observe strong dependence of the resulting structures and phases on both heating rate and temperature. A fast heating rate (25 C/sec) yields highly ordered crystalline hexagonal islands of sizes of less than 20 nm which are composed of a mixture of 2H and 3R phases. However, a slow heating rate (25 C/min) yields nanocrystalline and sub-stoichiometric amorphous regions. These differences are explained by different rates of sulfur evaporation and redeposition. The use of non-equilibrium heating rates to achieve highly crystalline and quantum-confined features from 2D atomic layers present a new route to synthesize atomically-thin, laterally confined nanostrucutres and opens new avenues for investigating fundamental electronic phenomena in confined dimensions.