This is the real reason we don't have VRR on PS5 Yet.
32gbps isn't enough to do 4K/120hz with 10-bit HDR enabled without resorting to chroma subsampling.
Yet, VRR isn't fully functional in 60hz limited displays or modes because LFC portion of VRR requires very high refresh rates .. ie above 60hz to activate.
To add insult to injury, 120hz refresh rate support on PS5 is game specific. You can't toggle it on from the system menu like Xbox Series X|S.
Only games that have 120fps Framerate mode on PS5 can use it with the exception being Rachet and Clank.
We could get around this 32gbps limitation by LOWERING the display resolution when running at 120hz, BUTTTTTT since Sony doesn't support a 1440p mode like the Xbox, your resolution will drop all the way down to 1080p!!!
But Sony won't add a 1440p mode cause they fear people will by a PC monitor instead of their 4K tv
So therefor stuck without VRR on PS5 console