Is there any way I could fix or mitigate the blur on applications using XWayland caused by fractional scaling?

Yes, the blurriness for X11 applications running with fractional scaling is expected, and it cannot really be fixed without porting those applications away from X11.

What KDE does is precisely what GNOME does when changing the text scaling factor; the only difference is that KDE modifies the Xrdb settings database, which is what applications using Qt or older X11 toolkits use, whereas GNOME changes a setting that is used by GTK applications. If you want GNOME to do the same as KDE, change the text scaling factor for GTK apps; for Qt/KDE/Motif applications, you’ll have to compute the desired DPI value and then write it inside the $HOME/.Xresources file, like:

Xft.dpi:   141

and restart your session.

Incidentally: this is a user support forum. You are not owed a reply, not even after a week. You could have also searched elsewhere, because this is a question that gets asked multiple times.