similar to how Netflix offers 4K but at much lower bitrate when compared to Blu-ray. the engineers have spent a considerable amount of time optimizing the encoding presets to be acceptable by the majority of their audience.

even though phones have 1080p resolutions, the pixel density is so high you could get away with the more minute detail that would be obvious on a 24' screen.

currently Xbox games are made to be played on regular monitors the devs are optimizing for that.