FIXED - SEE UPDATE
Thank you everyone. I typed out a very detailed reply with a ton of info but just noticed something which changes everything.
To describe something as "scaled" that technically means non-native and the resolution is interpolated. But maybe I'm wrong and Apple is using it (IMO) incorrectly (laymen?) to mean "change the resolution". I say this also because I am clearly on a BenQ UHD monitor with a native resolution of 3840x2160 and further confirmed my monitor settings to show it is outputting a 3840x2160 signal. So there is no reason why my MBP would display the native resolution of this monitor 1920x1080 (when I click on "Default for Display" under Display preferences).
This inaccurate native display resolution is confirmed when I click on "System Report" under About my Mac. When I click on Graphics/Display and choose my discreet video card (Radeon Pro 560) it shows my monitors. Under my BenQ monitor is shows: "Resolution: 1920x1080 @ 30hz). (Interestingly my other external monitor which is only 1920x1080 is displaying at 60hz...)
Anyhow. I "scaled up" to 3840x2160 and rechecked the system report and it's now showing "Resolution: 3840x2160 @ 30hz" (I know it can't do 60hz with my current connection). So in fact Apple considers "scaled" to mean "change resolution" and what they called "Default for display" has nothing to do with being a default, native, or anything else I can figure out other then normal HD.... Go Apple.
So it appears my concern isn't valid (although I need to further test because my 4k test videos don't appear any sharper then my 2k footage (I understand this is hard to perceive, but it's my job so I need to be certain).
But I do have another issue. I would like to keep 3840x2160 resolution but upscale my menu/dock/icons/certain programs for workability. One would think this would be sorted and at one point I thought the "Scaled" resolutions were a tool to do this. I've seen other posts here complaining about this. We want 4k but obviously need certain applications and interface tools larger for workability. Does anyone know?
(for all those who asked, I have a USB-C to HDMI 1.4 cable connected from my MBP (USB-C) directly to my monitor (HDMI 1.4). I already went ahead and ordered a DisplayPort to USB-C adapter per your advice before discovering I was wrong and am allegedly in UHD already.)
edit: UPDATE --- Okay. I think I have a firm understanding of what's going on after speaking with Applecare for an hour.
In short, everything is okay. Use the "scaled" feature to change resolution. Ignore "default" as any indication of native resolution when you're not using an Apple branded adapter. Also, it doesn't sound like you can control icon & menu sizes without effecting resolution on an external monitor (so I won't be able to keep 4k while having larger icons for workability).
Part of my confusion was checking display resolutions in the system report. Every time I changed the resolution using scaled (or by holding down option and clicking scaled for the hidden view of resolutions) I need to REFRESH the system report in order to see the new resolution.
The reason my display was appearing as 1920x1080 to begin with is because I have a 3rd party USB-C to HDMI adapter and so my MBP can't tell what the resolution of my display is supposed to be.
So I think I'm good.