Is anyone having issues with HP 27xq monitor not allowing variable refresh rate on One S?

Freesync 2 and HDMI 2.1
The second thing you should be aware of is that the Xbox consoles are implementing Freesync 2, not the original Freesync.

Its not supported on xbox s, that why it doesn't work.

Will the Series X support freesync 1?

Yes I'm there and the Game is for 2k. So that is not the problem.

My Xbox One X will not accepted the Setting "1440p with 120hz" with my HP X27i Monitor. Do you now that issue ?

With a lot of monitors, the lower the resolution, the higher the refresh rate you can have.

Near as I can tell, that monitor has a native refresh rate at 1440p of 60Hz (that is what it defaults to)...it then uses Variable refresh rate to bump it up higher. As noted above, the EDID fails as the Xbox needs a 120Hz setting to run at 120Hz. The monitor will definitely do 120Hz via HDMI but only on a PC/Laptop it seems.

I can't confirm it but I suspect that the monitor's native RR for 1080p is 120Hz.

This has been an issue for quite a few HP models, both whilst using the One X and also whilst using the newer Series X/S's

Hello,

VRR is supported via HDMI 2.1. The Xbox One X is the only console that has HDMI 2.1. Xbox One S has HDMI 2.0. This Fall 2020 the new Xbox Series X will also support HDMI 2.1 features like VRR, Auto Low Latency Mode (ALLM) and up to 120fps support.

The Xbox One X is the only console that has HDMI 2.1. Xbox One S has HDMI 2.0.

The Xbox One S and One X both use HDMI 2.0,

The Xbox One uses HDMI 1.4

The Series X will have HDMI 2.1.