1) what the hell are you talking about
2) why are you presenting that as a fact
3) software cannot magically create more pixels
1 & 2: Strange take on the matter, doubt it will ever be implemented or at least labeled as part of Apple Intelligence.
3: Creating pixels on the fly is exactly what software does all the time. Think DLSS and all other kinds of super-sampling or interpolation. That's not the issue here. While downsizing a 4k image into a HD screen makes it look better than if it was native HD, it won't replace the main issue with less or larger physical display elements (also pixels, kinda confusing) with poor readability, screen-door effect, and all the other issues one might have with low resolution screens.
The main concepts to bear in mind here are the difference between "Definition" (the size of an image in pixels, like a 1024*768 JPEG image) and "Resolution", a physical measurement of the smallest distance between objects, usually until you can't make any distinction anymore between two neighboring objects.
What we need is high resolution. Definition is dynamic, depending on the type of images you display and the precision you want to display them at, and the allocated GPU resources to process that.
I can see Apple selling old Apple silicon instead of newer to lower the cost. Reducing resolution would defeat the purpose and the main advantage Apple has over competitors.
That being said, it all depends on what their target actually is now that the Vison has sort of flopped. Will they recenter it around pure entertainment? If yes, higher frame rate is better than resolution. For productivity, it's the reverse, with lots of texts to read in a static position.