DSC compression, included in HDMI 2.1, is not "mathematically lossless", but it loses so little visual quality that it satisfies the IEEE standard for "visually lossless", so basically unless you shove your nose into a screen looking for differences, you won't notice them.
And with DSC compression, a bog standard HDMI 2.1 display and Ultra certified cable can already do 4K 240.
In fact, with 4:2:0 chroma subsampling, HDMI 2.1 can do up to 4K 480, if you're willing to take that extra hit in visual quality.
So really the only main benefit here will be getting 4K 240 native w/o DSC, and 4K 480 w/ DSC at 4:4:4.
HDMI 2.1 w/ DSC can already do up to 10K 120 at 4:2:0 chroma subsampling, whereas HDMI 2.2 is targeting up to 12K 60 at full 4:4:4 chroma subsampling. Maybe that would be useful if any 10K or 12K displays actually existed.
Yeah gotta be honest I don't see the purpose here. Thunderbolt 5 makes sense as a dock interface for multiple displays and I/O devices, but HDMI 2.2 is an A/V standard intended for 1 display. And like 50% of Steam is still on 1080p. And manufacturers like LG have even been ditching 8K displays.