Hi my turn to apologise for the delay
I checked this with my cintiq pro 24 at its recommended settings of 3840 x 2160 and 200% windows scaling [I also double checked with 175% windows scaling but it did not make any real difference to 200% except for the obvious size shift]
yes I get similar results as you - with option 1 the menu is too small to read at a distance, but I can read it when drawing directly onto the screen, so from my point of view that is not so bad - with option two the program, both menu and drawing area, are slightly blurred, same as the windows interface is, on widows scaling
I don't think you are doing anything wrong - xara UI needs an overhaul, but I doubt it is a priority at the moment...
you could try this - but I dont think it makes any difference:
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