Is it Normal that HDR looks "washed out" when viewing OBS Preview, on a HDR enabled display?

[HyeVltg3]

Is it normal that HDR looks "washed out" (as if the brightness is set too high) when viewing OBS Preview on a monitor with Windows HDR enabled?

I use PC to PC recording, two monitors of the exact same HDR-enabled model. I have Game-PC playing on one monitor with DP output from GPU and a HDMI out from Game-PC GPU plugged into the Input I/O of the Capture Card on my Record-PC. I use OBS Source Projector to project what I am playing on "Identity 1" display to the "Identity 2" display, which is actually the Capture Card detected as another Display in Windows Display Settings. Everything works fine but with my setup I can See OBS' Preview(Capture Card aka Identity 2) to my Side, capturing what I am seeing in front of me on the Identity 1 Display. So I can easily compare and notice that OBS shows a "Washed out" preview compared to what I am seeing on the monitor I have in Front of me.

Is it Normal that the OBS Preview looks washed out? Source is HDR since I am playing with HDR enabled and that gets recorded by OBS on the Record-PC.
I have to assume its normal, but it looks "washed out" because I am directly comparing HDR to SDR, right ? someone viewing my recording wont notice the "Washed out" colors because they dont have the HDR source to compare to. Am I correct in my thinking of this scenario or is this a REAL "Washed out" colors Issue.

I have been using a Color Correction Filter to get OBS to look identical to what I see on Display 1, but I get the feeling this is an Incorrect use of color correcting. am I shooting myself in the foot here by fiddling with colors of my recording and just making it worse for people viewing the Final SDR output, because it does look a bit "off" when I replay the mkv/mp4 via Media Player Classic. But I just chalked that up to the fact that OBS doesnt record HDR.

 

[Suslik V]

Any details? For example, numbers next to the HDMI (both in/out ports and cable), resolution and refresh rate, "bitness" of the signal - does it match your task? Modern builds of OBS can record and display HDR, and 10-bit expected to work OK. Also, OBS has "screenshot" feature (right-click menus for the Source, Preview etc) - you may try to use it to save HDR images in JXR format to compare them later.

In case you converting your input from HDR to SDR and then to HDR again - obviously, information will be lost.

 

[HyeVltg3]

Copied from Metadata in MPC from a 12sec Replay output - does this help?

Video
ID                             : 1
Format                         : AVC
Format/Info                    : Advanced Video Codec
Format profile                 : High@L4.2
Format settings                : CABAC / 4 Ref Frames
Format settings, CABAC         : Yes
Format settings, Reference fra : 4 frames
Codec ID                       : V_MPEG4/ISO/AVC
Duration                       : 8 s 950 ms
Bit rate mode                  : Variable
Maximum bit rate               : 10 000 kb/s
Width                          : 1 920 pixels
Height                         : 1 080 pixels
Display aspect ratio           : 16:9
Frame rate mode                : Constant
Frame rate                     : 60.000 FPS
Color space                    : YUV
Chroma subsampling             : 4:2:0
Bit depth                      : 8 bits
Scan type                      : Progressive
Default                        : No
Forced                         : No
Color range                    : Full
Color primaries                : BT.709
Transfer characteristics       : BT.709
Matrix coefficients            : BT.709

In my time waiting for a reply I was tinkering with using my old Color Correction or not. I think I may have solved-ish my problem (Brightness needed to be lowered by -0.02).
The CC Filter was set "too high" to the point I was ever seeing pixelated edges to dark areas, which I obviously never noticed because I never recorded with the CC off.
Without CC Vs. With CC enabled:

This isnt perfect, still tinkering with just lowering Brightness instead of the other sliders (Gamma, Contrast...etc), but the above screenshots (and then cropped so I could upload within the limits here) these are just screenshots taken from the OBS Preview > Save Preview Screenshot.
Tried to get the scene at the same place so I can reveal the "washed out" that I am seeing on the Left image with CC Off.

So is this normal?
should I further tinker with CC Filter to get it to look less "washed out" which I feel like is impossible without darkening the final image - and thus is my dilemma because HDR is SUPPOSED to brighten the screen, right? sorry in my tinkering, my entire understanding of Color Correction theory has been ruined and now I'm just going around in circles

Side-Q: You mention saving screenshots from OBS in JXL ? I cant find this option, my SS are saving as PNG.

 

[Suslik V]

...saving screenshots from OBS in JXL ? I cant find this option, my SS are saving as PNG

It is because you configured your OBS to output 8-bit video (aka SDR). OBS automatically chooses format of the screenshot depending on the "bitness" of the source. Your Preview - is what OBS puts to output right now (frame by frame). You set your OBS to output 8-bit video. Thus, Preview is 8-bit scaled up (on the fly) to 10-bit (or whatever your Display device is configured too), and screenshot is still 8-bit PNG (obviously it is not needed to be scaled up when saved, but Windows OS still may do it for you on the fly, when you try to watch this screenshot on 10-bit Display device).

You may try to screenshot the Source itself (before it painted over the OBS 8-bit canvas) not the Preview to see if there any difference.

Also, you may try to record 10-bit videos with OBS (if your capture device, port and cable allows it) and convert it to 8-bit later by using 3rd party tools.