SUMMARY
The Display Settings KCM will show the resolution of the screen in the scaled coordinate system of the Wayland compositor. This means that it will show a value that does not correspond to the physical resolution of the monitor, but with the screen scale factor applied. This can be confusing to new users, because they are used to think in terms of monitor resolutions, not screen coordinates.

It would be preferable to show both the resolution of the scaled coordinate system, as well as the physical resolution of the monitor in the same place. 

STEPS TO REPRODUCE
1. On Wayland, open the Display Settings KCM and set scaling for a display to a value other than 100%. 
2. Look at the resolution shown inside the screen icon in the top panel.

OBSERVED RESULT
E.g. for a 4K/3840x2160 screen at 200% scaling, the screen icon will show "(1920x1080)", even though the physical resolution is still 3840x2160. The KCM will show the physical resolution 3840x2160 in the dropdown box under "Resolution", but it is confusing to new users - it was to me.

EXPECTED RESULT
The screen icon should show a more descriptive text that includes the scale factor, e.g.:

1920x1080
(3840x2160 @ 200%)

SOFTWARE/OS VERSIONS
Operating System: openSUSE Tumbleweed 20211116
KDE Plasma Version: 5.23.2
KDE Frameworks Version: 5.88.0
Qt Version: 5.15.2
Kernel Version: 5.14.14-3-default (64-bit)
Graphics Platform: Wayland
Processors: 8 × Intel® Core™ i7-8550U CPU @ 1.80GHz
Memory: 15.5 GiB of RAM
Graphics Processor: Mesa Intel® UHD Graphics 620

ADDITIONAL INFORMATION
Every now and then there are discussions where new users are asking questions related to this, e.g. https://www.reddit.com/r/kde/comments/qxil1r/scaling_4k_monitor_without_loss_of_resolution/.