I’m puzzled by that as well. As you said, DLSS frame generation is a DLSS 3 feature, exclusive to RTX 4xxx (and presumable 5xxx) series cards.
DLSS 2 is primarily a resolution upscaling technology.
I use DLSS Swapper to upgrade to the latest DLSS 3.x.x and I don’t have an issue with blurry or smeared cockpit instruments on my 4K system. I have a 3090 Ti, so I can’t use frame gen.
Also, using nVidia Profile Inspector can unlock higher quality DLSS 3 presets.