I’m not sure if they explain this anywhere but this is what I gather:
The decoder settings happen first and they feed that image into all the other processes (grading, keying, PTRZ, stabilization) so in general it’s best to use full resolution when you can, especially for shots that are resized significantly.
Then Resolve scales the 4K Full Res (or half res or whatever the decoding is set to) down to the timeline resolution, but if you scale it up, it uses the optimal path. For example if you have 4K Full Res, scale it down into a 1080p timeline, then scale it to 200%, Resolve will calculate the resizing in a non-destructive way, rather than scaling down then scaling up. I presume the zoom for stabilization is part of the same calculation.
Again, as long as the source settings are set to Full Res you don’t have to worry much about the rest.
Cheers,
KC
Prehistoric Digital
PhD Grading Suite