Another way to look at it, the OS is always utilizing the full resolution. If you look at photos and video, plus other content, no matter what scaling options you pick, low or high, the detail is all there as if running full native.
For the internal screen, display settings and scale more or less help determine the size you want the OS interface, icons and apps, for usability and create razer sharp interfaces where pixels disappear. For example, if you open Photoshop and make a new image 100pixels by 100pixels, at 100% zoom, it should be small, using that exact amount of pixels of the screen.
Windows laptops also come default with UI scaling for internal high-res screens, but they let you turn it off if you need to.
Only time this all might not be true is running a game full-screen and choosing native or lower resolutions within the game, then content actually match the chosen resolution, and the internal hardware or OS will just upscale it to fill the screen.
I wish my external 38" display, 3840x1600, was actually double the resolution, that way pixels disappear, text looks sharp as printed text, but set the scaling so everything appears the same size as if it was 3840x1600.