ummm. If you do a bit of research, you know that it is not "for some reason".
There are two different types of signals for 4k 120Hz. Compressed or non-compressed. Panasonic's chips only handle the compressed format, while PS5, xBox-X, and RTX 3080 use non-compressed signals.
"If you’re into the technical side of video transmission, you might be wondering whether compression is used to achieve these high resolutions and frame rates in the HDMI 2.1 specification. The short answer is maybe. The spec supports both compressed and uncompressed modes, leaving it up to the individual manufacturers to decide which mode(s) to implement. " Audioholics.com
No one seems to know who is at fault. HDMI Forum’s Technical Working Group are suppose to have set standards for something to have the full HDMI 2.1 license. But I haven't been able to find a copy to read. You have to be part of the HDMI Adopter group to have access to downloading it.
The bug is from uncompressed vs compressed signal not being compatible, which seems rather obvious. And obvious that the two aren't going to be compatible with each other, as well as obvious that to get a license, they shouldn't have the option of "either or", but for both. HDMI is suppose to be universal. You can't give companies options of "either or" on things that are not going to be compatible with each other. I'm really surprised about the HDMI TWG were so lax on this thing. Giving companies an option that are incompatible with each other is just setting it up for something like this to happen.
Side note. I'm rather curious about how VRR would transfer through an AVR as well. To me, the so called "work around" seems like a much better way to go to begin with, especially on a performance/lag standpoint - Hooking up the console or computer directly to the TV and using eARC for the audio.