This feature is limited to videos that don't have a better resolution than 1080p. It's also even more limited to videos that the uploaders choose to enable it on, or at least, se subset of 1080p videos, since I've seen new 1080p videos both with and without it. Finally, it doesn't apply to old 1080p videos.
if people upload at 1440p/4K, then it's just a non-issue anyway as they have much higher bitrates.
Yup. Doesn't make it any less frustrating to see my favorite nature guy's videos turn to shit just because of it.