Meanwhile the anime fansub encoders are taking Blu-Rays upscaled with crappy linear scalers, using fancy deconvolution math to restore the original resolution m

Meanwhile the anime fansub encoders are taking Blu-Rays upscaled with crappy linear scalers, using fancy deconvolution math to restore the original resolution material, and encoding the result. You get a smaller file, and if played on a player with decent upscaling (i.e. mpv, which is what everyone uses these days), better quality than the original Blu-Ray. There's also often other processing involved, like de-banding filters to remove banding caused by low bit depth processing in the original material, deinterlacing/inverse telecine, color correction, etc. It all depends on how much effort the people involved put into it.