This is probably fine for those who don't ever use their game consoles for stuff other than gaming. I already have separate equipment for watching videos since I don't use streaming services, and I'll probably just use my PS5 for watching 4k HDR Blu-Rays specifically.
The black screen transition for HDR content on the PS4 wasn't really that big of an issue so I don't understand why Sony doesn't at least add an option to behave more like that. If I was planning on using my PS5 for other media, I'd be very irate, because like others in this thread, my TV also behaves differently with SDR content and itself helps to improve the image a lot on its own.
There was a period where the post-processing done on fancier LED TVs was mostly crap, but with the one I have today I vastly prefer its post-processing, which even works pretty well in Game mode. I am not a huge enthusiast for TVs so I imagine this is similar for other TV owners who aren't huge sticklers for highly accurate color reproduction. If I was in this situation with a top of the line OLED TV that had nice post processing for SDR, I'd be very irate with Sony right now.
If SDR content looks wrong/different in HDR mode compared to SDR then the TV isn't setup right. That's it.
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If anything this should result in SDR content looking more correct for most users, as the HDR spec is quite explicit in how it is interpreted and most decent TVs don't mess with it anywhere near like they do with SDR e.g. nonsense vivid modes etc.
Correct doesn't really mean
better. Unless you're a content creator deliberately working in specific colorspaces, you don't need perfectly precise color repro. The vivid modes people decry are preferences some people prefer. I especially prefer anime with boosted dynamic range and vivid colors from post-processing on my TV.