Yes, upscaling does create some artifacts but those are far less noticeable than artifacts created by compression. Plus when you're upcscaling from 1080p to 4K, the scaling artifacts are going to be so small, even on a huge screen, that they'll be practically nonexistent and the visible detail gain of 4K vs 1080p source would probably be practically nonexistent as well on a screen smaller than like 10m wide.

And downscaling actually creates the same kind of artifacts as uspcaling, plus you loose detail.