OTOH, it seems quite plausible that the most important numbers to represent are:
+0
-0
+1
-1
+inf
-inf +0
-0
+1
-1
+inf
-inf Bits s exp m Value
-------------------
0000 0 00 0 +0
0001 0 00 1 +0.5
0010 0 01 0 +1
0011 0 01 1 +1.5
0100 0 10 0 +2
0101 0 10 1 +3
0110 0 11 0 +inf
0111 0 11 1 NaN
1000 1 00 0 -0
1001 1 00 1 -0.5
1010 1 01 0 -1
1011 1 01 1 -1.5
1100 1 10 0 -2
1101 1 10 1 -3
1110 1 11 0 -inf
1111 1 11 1 NaN ± 0 (infinitesimal)
± 10^-2n
± 10^-n
± 1 (unity)
± 10^n
± 10^2n
± infinity
For fp4, this leaves 2 values. Maybe one of them should be NaN. What should the other one be?But you still have all the other numbers carrying sign info. This is only the sign of denormals and that's way less valuable. Outside of particular equations it ends up added to something else and disappearing entirely. It would be way better to cut it and have either half the smallest existing positive value or double the largest existing value as a replacement. Or many other options.