@LeeRatters The digital zoom can only be enabled in JPG only mode, and it does intepolate the image and upscale the image to a full resolution JPG.
I used to have a the function button on the front set to RAW/JPG, one click it would put the camera into JPG only and enable the digital zoom. After taking the shot the camera would immediately revert back to 'normal' RAW+JPG mode.
Its a useful feature enabling effectively a get out of jail free card to those shots that you might otherwise not get, if you physically couldn't get any closer. Of course those with FLA wouldn't be carrying only an X100F anyway but have a bag full of cameras and lenses