Until a year ago, Gnome/Wayland did it the way Windows does it! I.e. the method the OS used to make the text and the other UI elements the size the user specified refrained from applying any blurriness-causing resolution-scaling algorithm as long as you avoided the XWayland compatibility layer (and the compatibility layer that lets modern Windows support legacy apps makes the legacy app blurry, too).

Chrome's "zoom" feature (activated by the keyboard shortcuts Ctrl+plus and Ctrl+minus for example) does fractional scaling (i.e., allows the user to adjust the size of the text and the other UI elements) without introducing any blurriness. Installing Chrome and experimenting with that feature is probably the easiest way for the average reader to see what we are talking about.

One parenthetical detail is that (unlike on Mac or Windows) in order to get fractional scaling at all on Gnome/Wayland you have had to use a command line to add a particular key to a list named 'experimental-features', but that will change next month when Gnome version 47 will be released, at which time the user will be able to change the scaling factor in the Settings app just like one can on Mac or Windows without first having to configure anything or opt in to anything.

I would love to know the reasoning behind the Gnome team's decision here because just because although you or I might not be able to notice the blurriness on a HiDPI display or to say with confidence that the blurriness is there doesn't mean that the image is as sharp as it could be: the scaling algorithm used on Mac and on Gnome versions 46 and 47 is clearly throwing some "visual information" away regardless of the resolution of the display.