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Google slows down Firefox users when watching YouTube....
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It only supports up to 1080p/60fps, most videos I watch these days have 1440p or more, so the increased bitrate immediately makes the videos look a lot more crisp. For just a side to side 1080p comparison, there isn't much difference, just some more artifacting on the edges of things (not really that noticable). Maybe due to the YT stream being VP9 and FreeTube AVC? I don't really know to be honest.
Oh, maybe that's it. I don't think I have any devices in the house capable of displaying more that 1080p, and I don't use YouTube for any content where that'd matter. That's interesting, though; I wonder if that's a limitation enforced by YT on third party apps.
The higher resolutions on YT have higher bitrate, so even on a 1080p screen the 1440p and 4K options look a lot better.