We might have the same monitor—Gigabyte M32U? Your comment reminded me I didn't test over USB-C. I get the same results as yours with my Thunderbolt cable. Interestingly, at 3360x1890, I get 100 Hz over HDMI 2.1 instead of 98 Hz over USB-C (using an Apple Thunderbolt 4 cable, so not a bandwidth issue). That said, I do still get 144 Hz VRR with HDR at 3840x2160 since it doesn't have to scale that up for HiDPI.
If you have an M32U, did you ever notice a blue highlight/shadow behind black-on-white text? I would occasionally get that on lines of text on the right half of my monitor, which I haven't noticed since updating. If that's resolved, then this is an acceptable trade-off for me, because 120 Hz vs 144 Hz isn't huge and I don't enable the HDR on this monitor. But it's only been a couple days so I'm not counting on it.