If your external display isn't connected, what happens? Does Hyprland ignore that line from the config without an error and everything works normally?

It's ignored. This setup wouldn't suffice if my external displays used different scaling though, currently they all work fine at scale 1 for me.

  # external display
  monitor = DP-3, preferred, auto-left, 1
  # internal display
  monitor = eDP-1, preferred, auto-right, 1.333333