Commodore never upgraded Paula chip (knowing that company they probably immediately fired designer and didnt keep documentation to the chip), every model got the same 1985 state of the art Double Density floppy controller all the way to 1994 bankruptcy. As LIV2 already mentioned even their top of the line $3.5k A4000 Workstation shipped with gimped Floppy subsystem.

The floppy drive could read/write high density 1.76MB disks. I know, I had one. You're right that the Paula chip wasn't upgraded to handle double the data rate from the drive. The solution instead was that the disk span at half the speed.

Amiga HD floppy drives spun at 150RPM rather than the usual 300 from my understanding because the chipset couldn't handle a higher bitrate whereas on a PC the FDC switches between 250/500Kbit/s modes so I wonder if a pc controller could indeed read an Amiga HD floppy at all or if there are other differences?

Would probably depend on the drive. There were utils out there in DOS land that let you format higher than normal. Usually by playing with the sector/track sizes. But it depended on the drive to let you do it. The best I ever got was ~1.6 out of my drives/media.

The trick works by using the double sampling rate to inspect the normal data rate disk surface. When the disk surface already has a double data rate, the drive doesn't have a quadruple data rate mode to be able to read it.