>>408883053
The same way you can tell your GPU to render your desktop at 5x what your monitor is able to display. The GPU will render it then downscale/downsample it to your maximum panel resolution. VR is slightly different because it always renders at a slightly higher resolution than the display to account for some distortion but all you need to know is that 100% in SteamVR already does this.

You go above 100% when you have spare GPU power for reduced jaggies and slighty better image clarity. Some games I barely notice a difference while others become noticably less blurry.