I'm currently using Plasma Wayland on Arch with the 1080p monitor built into my laptop and an external 4K monitor right next to it at 175%, and it works flawlessly. When a window is half on one monitor and half on the other it actually looks how it's supposed to. I can drag a window back and forth between the monitors and watch it rescale itself to run at that monitor's native resolution. Some apps, you don't even see the transition. The current scale is passed through to the applications, so text looks nice and sharp.
Fractional Scaling on Plasma's Wayland session specifically is good now. GNOME on Wayland forces blurry scaling on every Xwayland app with no way to opt out.
oops - got confused, sorry! I meant plasma 5 rather than 6. it's been around 6 months or something since I tried it. might be that plasma 6 fixes all the problems I had but I sincerely doubt it!
Plasma 6.1 will release soon with some further improvements. But Plasma 6 with Wayland basically solved all my issues already. My setup is fractional scaling with "Apply scaling themselves" for Legacy Applications (X11) and Adaptive sync set to Automatic. Works better than my Windows setup so far