Fine, you made me look it up. M1 Air defaults to 2880x1800 on a 2560x1600 display, which is a 1.125x scaling. Nowhere near the 1.5x you claim.
When you set it to "more space" it becomes noticeably slower, but not blurry.
Apple basically settles into 220 dpi physical displays (250 moc MacBook Pro), rendering UI at a 2x scale as a default, except for MacBook Airs.