According to LTT it is due to the physical connection. Basically the panel is the same as Switch OLED and thus uses whatever it uses which is MIPI and thus no VRR (need eDP for that). The hardware clearly supports it (just plug an external display with VRR support into the deck and it works)
https://youtu.be/uCVXqoVi6RE?t=179
Basically Valve doesn't do large enough volume to make proper custom display economical so they have to take whatever they can get.