I still don't quite fall into that excuse.
There are 4 split-screen games on Nintendo Switch. The fundamental aspect of splitscreen is to be fun with friends and family, graphics will always take a hit no matter what.
There are even PS2/N64 games with 4-player splitscreen who take a huge hit on performance, but never matter because they are there to fun purposes.
This is probably Sony/Microsoft trying to push their live services. We have like a bunch of tools to moderate performance, dynamic resolution scaler, dynamic settings, reduce resolution and even now using FSR.
If I would suggest, take the Resident Evil 5 approach. Two 480p screen with black border. Putting dynamic resolution scaler and UE already have some sort of reconstruct tech inbuild inside the engine.