720p is non-widewine-DRM limit afaik. Free as in freedom distros don't have proprietary DRM that would allow you to watch more than 720p by default, but you can install the proprietary blobs and get higher resolutions.
You need widevine to play Netflix at all, and widevine is always proprietary. It has a few modes though, L3 is software only (easier to crack) and it's commonly limited to lower resolutions. L1 uses hardware to decrypt and will only output video over encrypted connections (like HDCP). Since L1 is harder to crack you need it to get the full resolution. I don't think there's any implementation of L1 for Linux other than for android and probably some custom embedded ports. There's also L2 but idk what that does.