You got it right.
The signal traces and the transistors for the rows and columns need to be masked black and since the feature size of these printed items on the LCD cannot get any smaller, the active open window pixel region has shrunk.
If said traces weren't masked black, they would be in contact with the LCD fluid manipulating transparency all over the place plus the added capacitance on those traces would also cause the circuit to fail.
The only solution would be if the LCD, both on top and bottom, had a separation layer as these traces and transistors without the black mask are transparent, but the active pixel regions would need to go down to a second layer where it is in contact with the LCD fluid, like a PCB with a via per pixel, where the vias still need to be transparent and LCD fluid proof. (Also, the materials which make the traces and transistors cannot alter the polarization of the light going through them...) This would magnify the price of the LCD by an insane amount, but, even the 4k panels would allow a tone more light through and such a designed 8k would probably become more efficient the today's 4k displays.
I would not want to be the one to have to figure out a way to align such a hi-res active-matrix module to it's next layer in the middle, as I'm sure that just the current masks and color stencils must have been a hell to perfect the manufacturing process.
Thanks for the great explanation.

My understanding is that, ignoring arguments as to if 8k is better/useful, as regards human eyesight. The other big issue, is that most things have NOT been recorded in 8k, by and large.
On the other hand, there is always improved (such as using more AI), image upscaling. To make the most of existing medias, resolution.
Really, the issue (as regards this thread topic), is the EU creating laws, which potentially limit, progress in some areas.
For example. I could invent an amazing new vacuum cleaner, which uses high pulsed, charged ions, and a huge vacuum, along with electrostatic .... (sorry, I can't tell you any more details, as you might try to copy my hypothetical, non-existent invention, lol)...and Magic Flux Capacitors. To clean better than existing Vacuum Cleaners, silently, automatically and fuss free.
But it uses the full 3kW (or whatever the agreed maximum rating in your country is), in its first version.
I would be unable to sell it (to everyone, not just some smaller subset of that area) in the EU (and probably the UK), unless I get the laws changed. Because of these pesky laws.
Similarly, if a great new TV (panel) type was invented, but its first version, was rather power hungry. Such as 1kW or even more. Then it would NOT be legal to sell it, in a number of regions/countries/places.
I don't think that (creating these over-encompassing, too restrictive laws), is necessarily a good thing.
On the other hand, we currently only have the one planet Earth to live on, and it does seem to be suffering from climate change. So steps to help that situation, makes sense.
I think on balance, they (e.g. EU/UK), should have come up with smarter laws. Which move people into buying more energy efficient/economic items, while at the same time allowing specialists/professionals/audiophools, to have their stuff and new innovations.