If you have capacity, you have the right to discharge. But anyone with oxygen saturations of 73% who says they want to leave hospital is lacking capacity. Because if they had capacity, they would understand that oxygen saturations of 73% are as close to death as a conscious person is likely to get.
So if they were saying "I know that if I take my oxygen mask off I will die, but I'm prepared to do that and I am ready to die" that would be one thing. People do make those decisions - refusing a tracheostomy because they know they couldn't stand to live with one, and understanding that they are going to die from secretion build up if they don't have it, for example. But the point is, they make those decisions with a reasoned discussion with their consultant, who makes a judgement about their ability to make that decision.
People aren't stupid, I think. They just don't realise that with oxygen saturations, even 1% is huge. For context, staff get twitchy if the saturations are 94% and start thinking about oxygen (COPD aside). At 93% or 92% they want to know that it's going to go up with oxygen. At 90% they're really worried. Less than that, well it's not good at all. 73% is frankly terrible.