It would not make any sense for them to be upscaled on the fly. It's a computationally intensive operation, and storage space is cheap. Is there any evidence of it being done on the fly?
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They could do that without upscaling. Upscaling every video only fly would cost an absolute shit ton of money, probably more than they would be making from the ad. There is no scenario where they wouldn't just upscale it one time and store it.