Freesync is the standard non-hardware way to do adaptive refresh, and most Freesync monitors do work fine with nVidia cards. By buying a "G-Sync Compatible" monitor, you are getting a Freesync monitor that nVidia has certified will work for sure with their cards.
Given that all the latest hardware module adaptive refresh monitors can also do HDR and high refresh rates, it's fair to say there's simply no way to charge the substantial premium for real G-Sync any more without offering premium features too. Note that AMD's Freesync Premium still does not require an extra hardware module, as it's just a branding indicating that such features are there. As with G-Sync Compatible such a certification can be given retroactively.
One of the biggest advantages of doing things in software is you can add new features later (which is how things like draft-wifi products can be upgraded to the final spec after it's finalized, or how Winmodems were upgraded to the final 56k spec using just a new driver), while just adding high refresh rates required a respin of the G-Sync chip.
The proprietary module does assure the buyer of a certain standard level of performance. Freesync monitors came in a wide range of usable minimum refresh rates, some too high to be of much use. I think it's hilarious though that nVidia will charge you extra for a hardware scaler in a monitor, yet not even include hardware schedulers in their graphics cards since Fermi. This is instead performed in software using the drivers, presumably so it can appear their GPUs are more power-efficient, since all the heat from that is coming off the CPU and not the GPU. There's got to be a missed branding opportunity in there somewhere.