Physik math Lower resolution with same bitrate avaible = better quality
but this is mostly wrong
the downscale over all decrease the quality related to the system Massive and can result in a loose of sharpness
it is related to that what people like alltime muddy or sometimes blocky
there exist many "tricks" to Prevent you stream self from get blocky
optimize the stream encode for example with "GPU" Intensive tricks like "Psycho+lookahead"
then you can take a look if its realistic in game to slow down quick actions (not true in shooter or similary)
another "trick" is to place "static" or slow motive Objects in Stream overlay to reduce the "change" content
a little Border arround the corners or a Little bigger face cam with a "sponsors message" box reduce the "refresh" area massive
sometimes related to the stream image its 40% block party added a little bar(Follower <> Donat,.......) (not transparent) from feeling 5% bellow on screen but reduced pixelparty complete (sometimes , related to the movement and nature of the stream input)