I don't understand why more hardware is needed - the hardware has to already be there to switch all of the physical inputs. Adding a logical input does not change that. I don't need any more physical inputs - I just need to be able to use the inputs that are available. Adding another logical input just tells the software which physical input to enable.

It is the same as if I went into setup and changed the physical input associated with one of the current logical inputs. For example: If I changed the logical input GAME from using the physical input COAX1 to use physical input HDMI4 - there is no change in the hardware when that association is changed.