Do you have a source for that?
Because I'd love if that were true, but every explanation I've seen contradicts that.
The default isn't more space, as you write -- it's actually less space, for bigger elements. Which is why you would need to render at more than 2x. It does, indeed, scale up -- there are plenty of articles from when Retina's scaling options came out that state it does lead to a slight amount of blurriness because of this.
To be clear, under Display > Scaled, the "More Space" option is true 2x retina, while "Default" through "Larger Text" are the ones that upscale.
You can actually verify this yourself -- it you take a screenshot of any UX element at "More Space", and then take a screenshot of the same element at "Larger Text", they're pixel-for-pixel identical. For everything less than "More space", MacOS is scaling up.