VESA claims DSC is visually lossless and has done a study to support this. I've looked at it, but the problem is I haven't been able to find independent studies of DSC. So I'd say we don't really know if it's visually lossless or not. I.e., you're asserting you know DSC is not visually lossless. If you have something to support that, please share. I'm saying we don't yet know either way because no independent studies have been done.
It is mathematically inherent that you
can't compress all signals to a smaller data size without losing some of the data in the process.
And the usual way to do that is to pick some "less noticeable" aspects of audio or video data which the algorithm then chooses to cut out (such as a loss of bit depth, for instance, or lowering the quality temporarily on animated content), similar to lossy audio compression losing certain frequencies.
But the thing is that with all lossy compressions you still
do lose quality, which is why Apple doesn't run their displays in that mode except to allow for lesser GPU support, accepting lower visual quality in order to have the displays working with those inferior graphics processors at all which can't drive the full data rate to Thunderbolt.
But that is not the native mode and if you want the full quality of the displays you should use a GPU which properly supports the full data rate without lossy compression, basically like lossless audio vs. MP3/AAC.
And normally when you pay the substantial sticker price for those monitors it makes little sense to then cripple them with compressed video instead of using them at full native quality, except in a pinch when no full-quality GPU happens to be present.
As far as I understand it, it's a special mode so even the smallest AMD GPUs in the Intel Mac Pro can still drive the XDR which can't provide the full data rate.
As I acknowledged, driving it could be a problem. I imagine when Apple does evenually introduce large ProMotion displays, they'll do it alongside DP Alt Mode 2.0 in both the display and the new generation of Macs (the first source and sinks for this standard were certified by VESA a couple of months ago). Then I'd expect that older Macs could drive these newer displays either without the ProMotion, or with heavy DSC.
They could do that, but the problem is that once you switch a USB-C port to these special Display Port alternate mode you cut off any Thunderbolt functionality and all you have left is a puny USB2 connection beside the four lanes all switched to high-bitrate output for Display Port only.
Daisy chaining is not possible in that mode, except in the separate DP MST mode which has nothing to do with Thunderbolt and which does not support any data connections, only Display Port.
So far Apple has always chosen to support Thunderbolt consistently, ignoring those alternate modes which would cripple the Thunderbolt functionality (and so
not supporting DP MST).
So I very much doubt they will go that route. Instead I expect them to upgrade to future Thunderbolt protocols with increased data rates where 8k video can still be embedded directly
without losing any Thunderbolt functionality.