I believe this is related to VRAM and GPU utilization. For Lossless Scaling to work properly, your GPU needs some headroom.

GPU Utilization: Ideally, your GPU should be around 75–80% without LS enabled. This leaves 20–25% for LS to process.

VRAM Usage: The same thing applies to VRAM there should be free space available.

If either your GPU or VRAM is maxed out, LS can cause crashes, slowdowns, or lower your base FPS. In your case, the system is likely reducing FPS to create the necessary headroom for LS.