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I've found out that proper display calibration does the trick. I have a few years old calibration profile for my display, and I've just activated it after moving to Big Sur. It's outdated for professional work though, and I have to calibrate display again, but that ugly font smoothing is definitely gone.

Display calibration has no effect on font smoothing. It may have a minor effect on contrast, but it doesn't change the way the OS rasterizes the glyphs.
 
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font smoothing on my MBP was set to 0 via terminal window. I did compare it to my wife's same spec model MBP and there is a difference. Her fonts look bolder and darker on default value. Initially I thought my panel was off due to variance but I then recall having had changed the font smoothing values 🤣
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