Usual basic fundamental misunderstandings, like usual.
DPI is literally dots per inch in spacial printing. Nothing today is rendering images [in digital space] using DPI, unless you're on archaic hardware for old monitors, which were ironically approximating print (ever notice how your old CRT mimicked printed text?). Like I've already said, PPI is used as a conversion for DPI to set the scale on paper (printing). PPI/DPI does NOTHING to the actual image, not even in rendering hardware unless you're on archaic computers and monitors approximating DPI. This is why it's Resoltuion/PPI on computers because it literally is a digital photo. There is no such thing as DPI in this realm.
However, printers don't even use 1:1 DPI and print at much smaller scales, but PPI is still used to calculate the DPI for Printing (mind you, this is what we're talking about, printing with art station; where your PPI of 300 equals the base 300 DPI of common printing).
In Scanning DPI is 1:1 still, where DPI is especially crucial. For example 300 is actually pretty noisy, and would provide a bad scan of art, good for smaller books. The PPI of this physical printed file at 300 DPI scanned will be 300.
To set a PPI of 300, for them to handle for the PRINTER to print in DPI ratio (calculated much smaller than 1:1), you set the Document Resolution to 300. That's what he has to do.
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Additionally, the reason FedEx does this is because if you hand them a JPEG at 72 DPI, and tell them to print a poster, you'll end up with a blur show. Because they scale up with the print (to your requested size). If you don't scale the image it would be forced to render at scale, which is 72 dots per inch, resulting in a drastically smaller image than the poster you intended.
For example the image below simulates this effect, which is why the 72 dpi is blown up.