Variable Refresh Rate doesn't work

please post the make and model of your monitor.

Here is the link from Amazon https://www.amazon.com/dp/B0BGQCKWSM?ref=ppx_yo2ov_dt_b_product_details&th=1

Glad to know is currently working, it could be that the screen doesn't actually need a variable refresh rate configuration, that's also common, have a great day

DisplayPort doesn't affect picture quality in any way. It's a digital transport for a video signal. The same hardware interprets the signal at the end. The only reason it's still around is apparently it has additional features for multiple displays. Likely you have different settings on that input which makes it look "better"

It can't do VRR because there needs to be bidirectional communication between the device and the display. They need to tell each other how to adjust things

If your display is showing better resolution then definitely the settings from the monitor is working independently. Normally, it would depend on the settings from the console but your set up seems to be working from the monitor itself because the monitor has its own freesync.