What are your thoughts on digital zoom with Canon PS cameras?

A good topic.  Canon has two slightly different methods.  The first is conventional digital zoom,  Let's say the camera is a G7X II.  It covers 24-100 mm f/1.8-2.8.  So if you start at 24 mm (equivalent) and start to zoom, you're using the whole sensor; but when the lens reaches 100 mm there's no more optical zoom, and the digital zoom begins to crop the sensor more and more as you want more magnification.  The cropped image is then brought back up to 20 MP by interpolation.  Basically making intelligent guesses as to what the extra pixels should look like in color and level.  For small amounts of extra pixels, it works quite well; but as you use more digital zoom, the picture eventually becomes mostly added pixels.  At 2x digital zoom, you're down to 5MP of real pixels and 15 MP if "fake" ones.  So digital zoom works quite well if you use it sparingly.

The second type Canon uses is the Digital Multiplier.  With that, every focal length is multiplied by 1.6x or 2x.  So the 20 MP G7X  that covers 24-100 mm, equivalent at 1.6x becomes a constant 8 MP camera that covers 38.4 to 160 mm.  It is still interpolated back to 20 MP.  As it happens, 8 MP prints very well as a borderless 8.5" x 11".

Panasonic cameras have three forms of digital zoom.  The first is regular digital zoom and goes to 4x and interpolates.  At 4x, it's pretty poor.  Their second is iZoom which is heavily processed and only goes to 2x.  it's pretty well done and works like regular digital zoom; but with more and better processing.  The third one is called Extra Optical Zoom.  It works like digital zoom; but they do not interpolate back up.  In the menu its denoted as EX10 MP on my FZ1000 which uses a 20 MP sensor.  That gives a maximum of 1.41x magnification, and it works very well.  There is also an EX5 MP which gives 2x; but you do lose some resolution.

In all forms of digital zoom, you make do with fewer real pixels.  To make it work at it's best I try and stay above 6-8 MP.  I also don't use it above ISO 400 with small sensors or ISO 800 with a 1" sensor as the images become noisier.

Early digital zoom got a bad reputation because there weren't enough pixels to work with, processors were weak, and the technology hadn't advanced enough, although my Canon G5 with 5 MP did surprisingly well in good light.