In the recent years, there has been an increase in distributed inverter-based resources (D-IBRs) in the system that is impacting the grid performance. Dynamic transmission and distribution (T&D) co-simulation is an effective method to evaluate the impact of D-IBRs on the system response, however, implementation is a challenge. This article innovatively achieves accurate T&D model coordination with inclusion of dynamic models of power electronic controls. It also demonstrates that D-IBRs operating with grid-forming (GFM) controls with frequency support capability can aid in primary frequency regulation in a low-inertia power system. The article discusses the fundamentals of dynamic T&D co-simulation to analyze the primary frequency response on the IEEE 39-Bus transmission system coupled to IEEE 123-Bus distribution system with D-IBRs with GFM controls. To demonstrate scalability, a large system (286383 T&D buses) is co-simulated: IEEE 39-bus transmission system with all load buses coupled to a total of 2328 parallel IEEE 123-Bus distribution feeders containing a mix of D-IBRs is considered. The article also discusses the use of parallel computation used for distribution system solutions enabled in the scalable multi-timescale T&D co-simulation framework along with computation time comparisons between the large and small system simulations with GFM inverter dynamics.