With 4:2:2 and 4:2:0 there is no obvious visible difference in the reproduction of color values compared to 4:4:4 for the eye. The restriction to 4:2:2 at 120 Hz is primarily noticeable in very fine details (e.g. fonts), but most games take this into account anyway (and hardly use them at all).
"Less color information" does not mean that obvious differences between the modes can be seen immediately. If differences are immediately visible, then this is more due to the fact that the playback device cannot correctly handle 12-bit signals and 4:2:2 (was a problem with various OLEDs and LCDs for years). Alternatively, your output device does not use the same configuration for 60 and 120 Hz, which results in visible differences for you.
Yeah. If you hook your PS5 up to a monitor (that can do 4K 120hz HDR via HDMI 2.1... and uhh... there's less than five of those atm, and I'm not sure if they have launched or not), you'll see the difference clearly in the PS5 menu on text and other high contrast UI elements with sharp edges, but that's it. When I use my PS4 Pro on my HDMI 2.0 4K HDR monitor, I can clearly see the change when HDR clicks in to sharpness on high contrast edges. But only on the system menu. Even at a monitor viewing distance where it looks horrible in the UI, I couldn't say I notice it one bit in games.
I don't think this is going to make for any real noticeable differentiation even in a few years time should 12 bit panels be readily available or what have you. Compared to lack of VRR support at launch, which for people with a VRR set is a really obvious difference. This really isn't anything other than curious.
And that's all presuming they don't increase the bandwidth with a patch.
But sure, I guess if you use your PS5 on a monitor and you sit close enough, and you spend a lot of time in the menus...
And to be blunt, this is coming from someone who has his PC output set to a lower refresh rate so I can get 4:4:4 on my monitor. I could push it from 98hz to 120hz at the cost of color accuracy and I choose not to cause it makes text look much worse, but then on my PC I'm looking at webpages and word documents regularly. Using the PS4 Pro on the same monitor? I looked into what was going on the first time I noticed it in the menus, and then promptly forgot about it.