I think you're missing the point of this paper—the precise thing it's showing is upscaling previously downscaled video with minimal perceptual differences from ground truth.
So you could downscale, then compress as usual, and then upscale on playback.
It would obviously be quite attractive to be able to ship compressed 480p (or 720p etc) footage and be able to blow it up to 4K at high quality. Of course you will have higher quality if you just compress the 4K, but the file size will be an order of magnitude larger.
In our hypothetical example, the compressed 4k data or the compressed 480p data? You would enhance the compressed 480p—that's what the example is. You would probably not enhance the 4K, because there's very little benefit to increasing resolution beyond 4K.
So you could downscale, then compress as usual, and then upscale on playback.
It would obviously be quite attractive to be able to ship compressed 480p (or 720p etc) footage and be able to blow it up to 4K at high quality. Of course you will have higher quality if you just compress the 4K, but the file size will be an order of magnitude larger.