Variable Refresh Rate

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.

Yes, I got what you were saying about using the display port with an adapter since the monitor only has display port rather than hdmi. But this will still not allow Xbox to have VRR because of the compatibility and requirements. Were you able to test out the games if frame rates are still good?

Right but I’m not using hdmi I’m using DisplayPort which maxes out at 240hz on 1080p like I said I’m using a hdmi to DisplayPort active adapter so the display from my Xbox to my monitor is DisplayPort so I have adaptive sync/freesync turned on in the monitor it’s self not VRR in the Xbox settings

No you can go on YouTube and see other people use hdmi to DisplayPort active adapters for their Xbox series X but it has to be a active adapter with a usb plug on it to power it you can’t just use a hdmi to display port cord you won’t get picture or audio. And you’re right it’s not bidirectional it has to be hdmi to display port active adapter not display port to hdmi active adapter. And the display port hooking up to the monitor also gives it a way cleaner and more colorful and crisp picture compared to just regular hdmi to hdmi