Recently found out my family account supports HiFi so I went ahead and enabled it. To be sure everything is HiFi I deleted smart cache in the app, force killed the app, cleared it cache and cleared its data.
Now it seems that when a track doesn’t have a HiFi version available it falls back to basic instead of HQ. I’ve made video of two phones together, showing the audio settings and displaying that when the HiFi phone falls back to basic (no Hifi or HQ logo available) the other phone set on HQ only still has the HQ logo on the album page.