Firefox doesn't decode the image into a full-resolution buffer and then downscale either, instead it does a streaming decode and applies downscaling on the fly. They call it downscale-during-decode[0]. I guess it doesn't do partial decoding of the 8x8 blocks though.

[0] https://bugzilla.mozilla.org/show_bug.cgi?id=1045926

Ah! It took a fair bit of digging to get there. Maybe I'll look into the firefox pipeline and make another post. In the mean time if anyone know the internals and how firefox does it, I'm eager to hear about it!