Non-integer scaling is essentially impossible to do well unless you give up and turn all your UI design into web pages. Otherwise you get pixel cracks and other issues from finding all the places things are/aren't rounded properly.
The laptop displays work by scaling down 2x/3x too.
I don't even mean the modern stuff. Even fairly old Windows apps can do fractional scaling just fine. WPF does it without a hitch, and it dates back to 2006. Even many WinForms apps can do it, and then of course Qt etc.
But even disregarding all that - if such scaling can be done without problems with webpages, then clearly there's no technical impediment to doing the same elsewhere. It's not like HTML is magic.
The worst part is that third party solutions (eg BetterDisplay) work. So Apple could find this if they wanted with ease. No clue why they’re so stubborn on it
Are you sure it works in a different way? I always thought Betterdisplay still showed you fractional scaling by downscaling from a much higher resolution. Well, I'd say I can still see the blurriness in the display when I pick a custom high dpi resolutnion from the list.
A 3840x2160 monitor run at 1x means a framebuffer of 3840x2160.
At 2x, the effective resolution is 1920x1080, and this also uses a framebuffer of 3840x2160.
At 1.5x, the effective resolution is 2560x1440. This is implemented by rendering at 4x (5160x2880) and then downscaling that.
At 1.25x, the effective resolution is 3072x1728. This is also implemented by rendering at 4x (6144x3456) and downscaling that.
The difference between all of these is quite noticeable.
Edit: Apparently Apple has been shipping its laptops with non-integer scaling for a while, which is interesting.