I’m not completely sure if you want a higher (“more space”) or lower resolution (“larger fonts”)? AFAIK, it’s not possible to go beyond the native resolution of the display.
To get the option for lower resolutions, some models require a change to lower-than-native refresh rate.
This is the case, for example, for my M1 MacBook Air on the Pro Display XDR: it only shows the
scaled option when the
Refresh Rate is changed from the native 60Hz to 59.94Hz or lower.