i am not using any tool like pgbouncer and have not run into any issues so far. Is it even required these days? Have you guys tested your setup without these connection poolers/multiplexers?

Each connection is a process on the server, that takes up both CPU and RAM, it will run out.

This solves the thousands of clients case for read in a way that is transparent to the clients.

Yes it's required at large scale, especially if you want to distribute reads or shard to a particular geographical area.