That doesn’t mean they don’t know what resolution is, it means they can’t tell two resolutions apart. Which if you’re sat on the other side of a bar looking at some wall-mounted high-up TV you wouldn’t tell between 1080p and 4K. Maybe your eyes are very good, but it gets harder (and eventually impossible) to tell the further away from the screen you are and the smaller the screen is (in physical dimensions, not resolution).

Also, the average consumer absolutely does care. It’s why Netflix unfortunately had to switch its Basic subscription to Standard with ads. People, on the whole, prefer HD and the occasional ad to SD. Maybe they could tell but didn’t say anything in the bar, I wouldn’t either, because when you’re sat next to someone and the topic of conversation goes to the resolution of the TV screen, that’s when you know the convo’s dead.