The PS5 has been criticized for how it handles HDR since its inception. While the PS4 HDR would slide in and out when a game didn’t support it, even when a game didn’t support the PS5 HDR pushed in and out before this update, resulting in incorrect brightness and contrast.
As noted by The Verge, with the new update released tonightYou can now set HDR to either always be on (this will push HDR even if a game doesn’t support it, resulting in incorrect brightness / contrast) or you can choose HDR to only be on when a game it supports (it switches to SDR if not).
It is believed that the reason Sony didn’t want to toggle HDR on and off is because it had a short black screen when booting a game, which would detract from the super-fast load times that have been marketed as one of its greatest features PS5.
There’s also now the option to toggle 120Hz on or off as a separate setting, and you can control HDMI Link based on whether they both turn the console on or off. So if you want your TV to automatically switch to the HMDI input when you turn the console on but not off, now is the time to separate those choices.