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Assuming that 3 is "meh" and 5 is "CATATONIC WITH AWFULNESS", that only really leaves 4 for what feels like quite a large continuum, if I feel at all below par. Having 4 options to fill the "below average" part of the scale, rather than 2 feels necessary to me.

It's the net promoter score all over again.

I don't know if there are inventories for depression, but every time someone tells me I'm a bit talkative I take the Young Mania Ratings Scale. It's a wonderful, wonderful tool:

https://psychology-tools.com/test/young-mania-rating-scale

Seems like an odd thing to complain about... I mean you are asking someone to boil down (often) and entire year into 1 of 5 numbers. I don't find it shocking that with such rough granularity people opt for smaller intervals than 1.

Are you trying to justify arguing that they're not actually at a high stress level? That doesn't seem very nice. 3.5 and 4.5 are perfectly within 1 to 5 so I'm not sure what you're getting at here.

1-5 with half increments has 9 possible scores which is basically the same as 1-10. I think this is what is meant, not "people say 4.5/5 but nobody is really that stressed, they must be thinking 4.5/10".