Does the Apple TV 4K override a 4K TV picture scaler to do its own Upscaling?

I understand 

• a 4K TV device itself upscales a 1080p 4th generation Apple TV HD image 
• by adding pixels otherwise the picture  on the TV screen would be a quarter of the size.

But I also understand, for example, 

• that if you set the Apple TV 4K box to output at 4K SDR 
• The box will output at the resolution you have set during setup 
• and if the content itself is of a lower resolution it will then be upscaled.

Does the Apple TV 4K box itself use your 4K TV technology as an output source to do its own Upscaling 

unlike the Apple TV HD box where the 4K TV device itself does the Upscaling because the maximum resolution of the streaming box is 1080p?

I am asking as I own an Apple TV HD currently but might upgrade to an Apple TV 4K and am weighing up if it is worth the investment.