Answering my own question after some research. It looks like OpenAI decided not to introduce 4.1 in ChatGPT UI because 4.1 is not necessarily a better model than 4o because it is not multi modal.

Now you can imagine introducing a newer "type" of model like 4.1 that's better at following instructions and better at coding to bring a sort of overhead thats already too much with the given options.

OpenAI confirmed somewhere that they have already incorporated the enhancements made in 4.1 to 4o model in ChatGPT UI. I assume they would delegate to 4.1 model if the prompt doesn't require specific 4o capabilities.

Also one of the improvements made to 4.1 is following instructions. This type of thing is better suited for agentic use cases that are typically used in the form of an API.