How to properly use scaling on an external display (from MacBook Pro 2016)?
You need to set it to 1080p in order to get the scaling. A bit counter-intuitive this actually means that the display is using the full 4k resolution, but font sizes, window decorations, etc. is scaled to have the same size as with a 1080p display. This is what Apple calls "Retina Mode": Video, photos, etc. will display in their full resolution.

So try setting it to 1080p and then check on your monitor's on screen display that the incoming signal is actually 4k!

Note that the list of resolution in System Preferences > Display will also contain resolutions such as "1920 x 1080 (low resolution)". The added "(low resolution)" means that these are actual 1920x1080 resolutions, and not scaled like in Retina Mode.

If you do not see the list of resolutions, then hold down the Option-key and click the "Scaled" radio-button besides "Resolution:".