Playing back 1080p and 720p videos (same bitrate) on a 720p display
When you ask how something will 'look' you're in the realm of the subjective. Things 'look' different to experienced professionals than they might to the average viewer.

But still, the 1080p video will not be as good no matter what you view it on. When you encode at a low bit rate you aren't removing pixels, you're mostly removing high frequencies. Doing either will reduce the amount of information, but in different ways and with different visible effects and artifacts.

The information you lose with very lossy encoding doesn't lie in the spaces that inevitably are discarded when you downscale. You'd lose in both domains. But how that 'looks' depends to some degree on who's looking.