“But isn’t the fade in/fade out lost when the frame is recorded or presented on a video display.”
Only if it doesn’t move to another pixel at all. As soon as you pan the camera everything will fade in and out during the exposure so the motion blur will be soft. The extreme example would be a specular highlight motion blurred. Instead of it being a very digital straight line (bottom) it would be a soft gradient on each end of its motion blur path (top).