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5k/120hz can be done right now using DSC

Apple already uses DSC (and has for years) with the XDR display
 
I don't see it being updated until Thunderbolt 5 is released. A 5K 120Hz panel would require more bandwidth than TB4 can carry, so there's not much else Apple can do to the ASD until then. And then that still depends on if/when LG can make a 5K 120Hz panel.

I suspect the XDR will be first in line for an update, but again will require TB5 to be a thing before it can be updated.

My personal prediction is no updates until sometime in 2025. And since 2024 is just getting started, you're going to have a long wait.
Yeah I’m pretty sure it’s possible to do it right now, although that’s the very limit of what it can do now. I honestly wouldn’t mind if the new one came out and I saw no huge differences in the new one and old one with my current Mac, but buying a Mac in the future yields more display features.
 
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