That is because the AW3423DW does not support DSC on a DP connection. AW3423DW review  "Since the DisplayPort 1.4 input on the monitor doesn’t support DSC (Display Stream Compression) due to its G-SYNC module, there is only enough bandwidth for 175Hz with 8-bit color or 144Hz with 10-bit color without resorting to chroma subsampling."
I have been having difficulty enabling higher resolutions/color settings on my AW3423DW.  Running Windows 10 using EVGA 3080 12Gb FTW video card connected to AW3423DW using DP to DP cable provided with AW3423DW. I am using Windows in SDR mode (HDR is disabled). Within the NVIDIA Control Panel, Change resolution, the Connector shows as DP - PC display. I have selected PC 3440x1440 (native) resolution but Refresh rate drop down only shows 60Hz/100Hz/120Hz/144Hz. The 175Hz option supported for DP is missing. This is problem #1. At 60Hz, I can choose NVIDIA color settings of "Highest (32-bit), 12bpc, RGB, Full" which are the full capabilities. However, as soon as I select any higher refresh rate, say 100Hz from the above drop down and apply, the output color depth drops to 10bpc. I believe this is expected but format and dynamic range now only allow YCbCr422 Limited. Even setting output color depth to 8bpc at 100Hz doesn't help. At anything other than 60Hz, the only color format and dynamic range available are YcrCb422 and Limited. This is problem #2. From the specs and in depth articles online, I should be able to select 144Hz with 8bpc depth, RGB format, Full dynamic range. I tested my older ACER X34 Predator by connecting it to the same DP cable and it was able to display 100Hz (it's highest refresh rate) using 8bpc, RGB format, and Full dynamic range without any issue.
AW3423DW, DP only allows YCbCr422 limited above 60Hz