I’m quite sure that it’s for HiDPI scaling, not for font scaling option. I.e. it’s for this setting:
gsettings set org.gnome.desktop.interface scaling-factor 2
And Fonts – Scaling Factor should correspond to:
gsettings set org.gnome.desktop.interface text-scaling-factor 1.5
I’ve been using Font Scaling Factor set to 1,25 for ages (and leaving font sizes to defaults). Also if you enable Large text option in Gnome settings - Accessibility – it actually sets the Font Scaling Factor exactly to 1,25
From my experience, Font Scaling Factor setting forces quite a few (if not all) buttons to become larger when text labels are no more able to be painted inside a button, so to say. On 1,25 buttons’ increase in size isn’t very big. Also for some application it leads to misalignment of buttons, text labels, etc – but again, mainly on larger than 1,25 factors.
Fractional HiDPI scaling – when it works good – should scale all the interface elements proportionally, as far as I understand, and would be a better / more pretty option.