Everything you see on the TV is upscaled to 4K. That is all it will display. It doesn't have a variable resolution.
The 1080i shows the resolution the TV is receiving. It then, as stated before, is upscaling it. If you give it a poor feed, it can only do it's best to upscale. Nothing coming in at 480p is going to upscale well on any television. And your decoder is already upscaling to 1080i by your settings and may be doing a very poor job. Let it send the native signal it receives and see if the TV doesn't do a better job than what you have now.
Windows 10 desktop UI will default to 4K when it sees the TV resolution. Windows 10 will also support 4K (and 8K, I believe) video. If you manually set it to run at 1080p, the TV will do an upscale. This shouldn't be an issue unless you are running a game that your card can't handle.
Sony XBR-65X900F // Sony HTZ9F Sound Bar & SAZ9R Speakers // Xbox One X & PS4 Pro