I don't get it. Are they compressing the range of SDR display for SDR content so that HDR content can now use the full SDR range of SDR display?
As in "we crippled your SDR display so that you can more enjoy the HDR content and buy an expensive HDR display to be back at the normal SDR range for SDR content"?
No, at least not on my Mac. Nothing's crippled, don't worry.
If my screen is already at 100% brightness then there's no HDR effect. 100% brightness is true 100% brightness, the max capability of my backlight.
The only difference is that if my screen is at less than 100% brightness, the HDR content can be brighter than the rest of the screen because it has the headroom.
On conventional LCD displays you are presumably losing some contrast in SDR content here, because running the backlight brighter to allow for this will also elevate black. The rumor mill suggests Apple is planning a move to Mini-LED displays with thousands of local dimming zones, which would handily address this.
Not only contrast, but also the gamut. If display is capable of 255 levels of color and you remap 255 to e.g. 128 to leave the rest for HDR you have only half of the possible colors available for SDR. Or how is this supposed to work?
The feature only works on P3 displays, so gamut when displaying UI (which I'd assume is nominally within the smaller sRGB space) likely isn't an issue.
Also, per later comments, this feature only kicks in when you're actually viewing SDR content, so there's no downside (even contrast) in everyday use.
Well it's not really a big deal since only your UX gets a smaller range... when you're presumably watching the content?
But it seems like Apple might be gradually moving from 8-bit to 10-bit displays. They don't really advertise it clearly, but if the technical specifications say "millions of colors" it means 8-bit, if they say "billions of colors" it means 10-bit. (256^3 vs 1024^3.)
So if you've got the iMac model with the 4K screen, it's 10-bit and therefore capable of 1,024 levels of color. So remapping the UX to e.g. 512 will still be fine, assuming (safely, I think?) the compositing is all done using 10-bit color.
