Rather than scaling the entire canvas, pinching in Paper pops up a loupe that sits on top of the canvas, magnifying only the area beneath the loupe’s glass. It keeps the context of the wider picture visible, whilst still enabling finer-grained editing on the zoomed-in area.
Please try this out in person, because the delight is in the details. For instance, the developers have made it such that the zoom scale is a fraction of the overall loupe size — it doesn’t scale 1:1. This creates a wonderful ‘parallax’ effect as you make the loupe bigger and smaller, mimicking how a lens functions in real life.