On X11, with MOZ_USE_XINPUT2=1 set in the environment Firefox exhibits much improved pixel-by-pixel touchpad scrolling, and touchscreen scrolling actually works. On Wayland, the behavior is already enabled by default so the environment variable has no effect.
Historically, the reason why this was not set by default on X11 was an outstanding bug that caused scrolling with wheel mice to periodically break: https://bugzilla.mozilla.org/show_bug.cgi?id=1182700
However this bug appears to only affect KDE Plasma systems, and the KWin developers just fixed an issue in KWin, and now the problem no longer manifests. See https://bugs.kde.org/show_bug.cgi?id=394772.
Therefore, there no longer appear to be any blockers to enabling this behavior by default by setting MOZ_USE_XINPUT2=1 in the environment. X11 Firefox users should really appreciate this change.