@Siff The explanation makes perfect sense from a data science perspective. The grid is aggregating data...it is a window function. The simplest example is an average (rectangular window function). Take the average of 10, 10, 20, & 80. The average is 30. Clearly, 80 was included, but the output (30). When the OP says that it "smoothes" away extremal data, they literally mean smooth:
That said, there are better methods that can preserve extremal measurements. These are called "High Resolution Schemes" or "Total Variation Diminishing" methods:
These let you recover data like this:
The challenge with using these for weather is scale and computing power.
Stay safe out there!