How to get full resolution for LG 27UK650-W with MacBook Pro?
Some things aren't adding up here. You say the monitor is 4K, instead system report indicates some display has a 5K resolution.

However, I think you are misinterpreting the numbers. The scaling option still renders at the highest resolution of your monitor, it just enlarges the UI. What you are losing is space on your monitor, because UI elements will appear bigger, in order to be readable.

Imagine an app opening by default with a resolution of 1600x900. If your monitor only has this resolution, it will fill the whole screen. If you instead have a 4K screen, that app will only take some small space on the monitor. Now if these monitors were the same size physically, the app will appear much smaller on the 4K screen. Now scaling allows you to change the appearance, to match the app's size from the 1600x900 monitor on the 4K screen and will display the app fullscreen. The app ends up physically being the same size, yet rendered and shown at the high-res of the 4K monitor.