It won't be any worse, it will just play at the TV's definition.
Yeah it will, but since the signal isn't designed for it, certain lines may be a bit off (the TV is trying to fit, say 1080 lines into 480), whereas on the right definition you don't have that problem. It might not be noticeable often, however.
You clearly have no idea how a video transmission system works. If it were as haphazard as you seem to think it is there would be no standards for displaying video, but there are. There are resolution, signal frequency and timing characteristics defined for both HDTV systems and analog TV systems like NTSC (the analog TV system used in North America).
In digital video there is no such thing as "a line being off", etc.
The image stored on a Blu-ray disc a digital presentation. There are no lines, only pixels.
From the way you are using the term "lines" it seems to refer to an analog display system which has nothing to do with digital source material such as DVDs, Blu-ray discs, Netflix streaming, etc.
In the scenario of displaying a Blu-ray on an old standard definition TV. The standard def TV is NOT trying to fit 1080 into 480, it has no idea how to display anything other than 480i (NTSC). The standard definition TV isn't doing anything but displaying a video signal it's getting from the player.
Inside the Blu-ray player is an advanced decoding and video scaling chip. It knows perfectly well how to handle different content resolutions and frame rates and how to display it. It is very easy to downscale 1080 to 480. Scaling down is a trivial matter compared to scaling up.
All of this is done in the player, it is then output in a standard NTSC 480i signal, that the old standard definition TV can accept.
As an aside, HDTVs also have scalers. The HDTV is made to handle a variety of input video signals ranging from 480i (SD TV channels, unprocessed DVDs), 720p or 1080i (HDTV channels) and 1080p sources like Blu-ray discs or high quality streaming videos from companies like VUDU. Inside an HDTV is a video processor. It will take the incoming digital video and scale it up or down appropriately to the native resolution of the TV's panel.