HDR is fine, it is just the cutscenes that are jacked up with the black bars.
EDIT:
I have the game on both PC and Series X and just tested this on the PC with HDR disabled and sure enough, black bars were black. It appears that the gamma is jacked up in HDR with the black bars. The stuff in-between looks fine, but something is 100% jacked up with the black bars and HDR enabled.
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