Fractional scaling works well on Plasma under Wayland if you're using an up to date distribution.

Though other things don't work well. Like Plasma's whole toolbar with clock widget etc. It freezes, and you can't interact with the frozen widgets. Only answers are kill and restart, reboot, or switch back to X. It'll get there, but it's still not at a level I would say is daily driver (for me - I like my toolbar clock to actually tell me the current time).

(Kubuntu with KDE project's PPA to be on latest stable)

I'd try with a rolling release and see if you still encounter the problems. I use Plasma panels with the clock widget and haven't experienced freezes or had to restart anything.

The DE itself, yes. This is true of GNOME as well once the hidden setting is enabled. Unfortunately there's still individual programs which don't behave correctly, which for now means that 1x or 2x displays are still best if a trouble-free, low-tinkering experience is the goal.

The GNOME setting is not hidden anymore, fractional scaling seems to be a first class citizen now.

My experience is that it makes a lot of things visibly blurry. Has that improved at all?

I use 150% on my main monitor and everything looks perfect except for two proprietary apps installed through flatpak: Zoom and Spotify. These two are not really known to be quality software in the first place so I think it is safe to blame them for this quirk.

Indeed; it works perfectly on my postmarketOS PinePhone, which has the most recent stable GNOME release.

No. It really isn't. I can tap a keyboard shortcut and change my desktop resolution in .1 increments and everything just works and scales up and down. I've run my internal laptop display at 1.7 for 3+ years. (Sway)