I want to express my gratitude to everyone here, especially the thread owners and all contributors, for assisting me in finding the solution.
I am thrilled to announce that I have successfully achieved running both my gaming PC and MacBook Pro M1 at 4K@120Hz with HDR on my LG C2 42-inch display.
In my current setup, my MacBook is powered by a single USB-C connection to the display, allowing it to run at 4K@120Hz while simultaneously charging and sharing peripherals such as the keyboard, mouse, and webcam with my gaming PC.
With just a double press of my control key, I can effortlessly switch between the two devices, both operating at 4K@120Hz.
My objective was to find a streamlined single-cable solution for my MacBook Pro M1 to seamlessly integrate into my KVM setup with my gaming PC on my LG C2 42-inch display, while sharing all peripheral devices. I'm pleased to announce that I have achieved this goal. Now, I can easily transition between my Mac and work laptop by simply plugging and unplugging a single USB-C cable, while still enjoying the convenience of sharing all my devices with my gaming PC, and maintaining a 4K@120Hz HDR display. This community has played an invaluable role in helping me reach this milestone. Thank you all.
@AironMan