Nothing is set automatically I run a window manager and it starts what I tell it to start. I observed that at present fewer env variables are now required to obtain proper scaling. I did not personally dig into the reasoning for same because frankly its an implementation detail. I just noted that qt apps like dolphin and calibre are scaled without benefit of configuration while GTK apps like Firefox don't work without GDK_SCALE set.
X actually exposes both the resolution and physical size of displays. This gives you the DPI if you happen to have mastered basic math. I've no idea if this is in fact used but your statement NOTHING provides that is trivially disprovable by runing xrandr --verbose. It is entirely possible that its picking up on the globally set DPI instead which in this instance would yield the exact same result because and wait for it.
You don't in fact actually even need apps to be aware of different DPI or dynamically adjust you may scale everything up to the exact same DPI and let X scale it down to the physical resolution. This doesn't result in a blurry screen. The 1080p screen while not as pretty as the higher res screens looks neither better nor worse than it looks without scaling.
Why would I need to develop another X11 I believe I shall go on using this one which already supported high and mixed DPI just fine when Wayland was a steaming pile of shit nobody in their right mind would use. It probably actually supported it when you yourself were in elementary school.