Doing other stuff with the system likely preempts the slowdown. Someone in another thread reported that just moving their mouse increased refresh rate.
I can't see it as an option for my MBP, though I do have the monitor connected in a roundabout way, through a dock. Monitor did support FreeSync, which is the open one too, so wondering what's going on there. Monterey Beta 6 here (along with all the pains that that version brought).
And I think coming soon to macOS Monterey too. If we thought the M1 MBPs had impressive battery life at launch...