Encountered the same issue at 4K and 1080p.
The issue is, however, less pronounced at 1080p than at 4K. (I am not too sure about this anymore, I think it was that way on directx11)
1080p Native (Stretch 100%):
Game inbuilt telemetry reports frametimes around 5ms +- 1ms - around 430FPS
RivaTuner reports frametimes around 2ms +- 1.5ms - around 430FPS
1080p 2x DLSS (best case scenario others perform even worse):
Game inbuilt telemetry reports frametimes around 5.3ms +-2ms - around 400FPS
RivaTuner reports frametimes around 2.5 ms +-2.5ms - around 400FPS
Transformer and CNN perform virtually identical
4K native (Stretch 100%):
Game inbuilt telemetry reports frametimes around 5.5ms + 2ms (sometimes) - around 220FPS
RivaTuner reports frametimes around 4.5ms +- 0.5ms - around 220FPS
4K 2x DLSS (Best case others are worse):
Game inbuilt telemetry reports frametimes around 6.5ms +- 0.5ms - around 175FPS
RivaTuner reports frametimes around 5.4ms +- 0.3ms - around 175FPS
I have noticed the same, but less extreme, issue with FSR3 (TAA) from observations it can actually reach higher than native frame rates and frame times at 4K, but way less than would be expected at 2x upscaling.
Borderless Window & Fullscreen seem to make no difference.
Tested on Vulkan, might have been even worse in Directx11 I don't recall the exact numbers however.
Setup info:
Ryzen 7 5700x3d
RTX 4070 Super
ROG Swift PG32UCDP with VRR enabled running at 4K 240hz, dual mode 1080p 480hz wasn't tested.
Nvidia App Global settings override for Preset M active (Possible cause? unlikely though as fsr3 performance seems to indicate probably not.)