For docked, I would guess it'll be rendering 1080p native, DLSS to 4K.
you were on the money until this part. there's no way they go from 540p internal res up to 1080p under any circumstance (in the same game). Chance of (DLSS) upscaling to 4K is existing but small given they sent out some dev kits without any 4K support. don't count on 4K being supported with anything more than integer upscaling from 1080p.
it's nowhere near as bad. frame generation is garbage that produces tons of artifacts and increases input lag. the next "true" frame has to already exist for interpolation on the fake frames to begin, meaning the device is holding back a finished frame at, say, 20 fps while pumping out intermediate fake frames that lead up to that true frame. with 4x fake frames you can get 80 fps that feel worse than 20 fps. it's a complete non-starter for actual gaming and only exists as a marketing trick. perhaps in something barely interactive like a strategy game fake frames could be acceptable. like a strategy game with thousands of units on screen and your PC only needs to render the action at a quarter of the framerate. that's the only valid use case I see. and even in that use case it's complicated because one would want the UI and mouse input to run at a much higher rate of course. 20 fps for the whole game wouldn't be acceptable. the GUI and "world rendering" would need to be completely separate, similar to how some games upscale the action but render the UI natively.
it's not subjective in the slightest, you dunning kruger victim.