Quite aside from the minimum increment that the human eye can detect (I found 1/2mm listed on google as the minimum—but not source information for that statement), what is the finest line that could be generated on a steel ruler?
Back in 1970, I bought a very pricy slide ruler (Post) that had a white plastic lamination over bamboo body, and a cross hair made from the web of a black widow spider. Those filaments were finer than anything that could be manufactured at that time (200 to 500 nanometers in diameter).
The 1/128 (approx. 0.008”) size probably exceeds our ability to read the measurement on a ruler, but is a “loose” dimension when using a vernier caliper.
My conclusion is, use the right tool for the job. For woodworking, that generally means 1/32”. Claims to working closer than that are probably delusional. And for that level of measurement, a steel ruler is fine. For close work, a vernier caliper or a micrometer.
The problem with vernier calipers is that a 40” one will set you back $500.00 for the bargain basement version and $1,500.00 for a name brand one.