Why latency goes up, not down
To insert a frame between frames A and B, the GPU needs both ready first — so frame B is already rendered, but it gets held back while the generated in-between frame is shown. That held-back frame is the extra latency: your click has already reached the game, but the screen is showing a slightly stale image. The lower your base (real) framerate, the more noticeable this lag becomes and the worse the generated frames look, because the gap between genuine frames is wider and the interpolation has to invent more motion.
How to spot real frames vs. drawn ones
A high FPS counter tells you nothing on its own — watch the latency reading instead. On Nvidia that's the PC Latency value in the overlay; it only appears when the game supports Reflex and your GPU is compatible, so it isn't available everywhere. On the AMD side and through tools like PresentMon you can also surface end-to-end latency. Turn interpolation on and note the number, turn it off and note it again. If the milliseconds climbed noticeably while the real framerate stayed flat or dropped, your smoothness was bought with responsiveness.
Where it fits and where it doesn't
In slow or story-driven games — wheel racing, RPGs, sims, anything at 4K on a TV — an extra 10–20 ms of latency is usually invisible, while smoother camera pans and turns genuinely feel nicer. The catch is that your real framerate should already be decent (roughly 50–60+) before turning it on: at a very low base FPS, interpolation both lags more and artifacts more visibly. In competitive shooters, fighting games, or anything decided in fractions of a second, leave interpolation off and chase real frames instead: lower graphics settings, DLSS/FSR in upscaling mode (it renders real frames rather than inventing them), a sensible resolution. And enable Reflex or its equivalent where available — it cuts latency regardless of whether interpolation is on.
Verdict
Smooth-motion tech solves a narrow problem: making a slow picture more pleasant to look at without making the game itself faster. For single-player and cinematic titles it's a fair trade; for competitive play it almost never is. Simple rule: if the game has a score and an opponent, chase real framerate and low latency, and save interpolation for the pretty, unhurried games.