Limiting 4K to specific configurations is a DRM decision, not a video quality decision. There's nothing special about 4K video: it's typically encoded in the same codecs as videos in lower resolutions (H264, H265, VP9) and basically any modern device can play it without a problem. I never had any issues with 4K YouTube videos on Linux or Windows, regardless of configuration/driver.

I think what they're trying to avoid is people capturing/copying the 4K stream, that's high quality enough to be considered a "master", and distributing it. IMO it's a pointless thing to do because dedicated piracy groups will quickly figure out ways to do that anyway, and it makes the average user experience worse. However, they are probably contractually obligated to do so.