The TL;DR is that the organization that controls the HDMI standard won’t allow any open source implementation of HDMI 2.1.
So the hardware is fully capable of it, but they’ll get in trouble if them officially implement it.
Instead it’s officially HDMI 2 (which maxes out at 4k @ 60Hz), but through a technique called chroma sub-sampling they’ve been able to raise that up to 4k @ 120Hz.
However there are some minor reductions in picture quality because of this, and the whole thing would be much easier if the HDMI forum would be more consumer friendly.
In the meantime, the Steam Machine also has display port as a completely issue free display option.
Adapting DisplayPort to HDMI with minimal quality loss is child’s play. It’s the other way around that’s misery.
Any cheap adapter cable that supports DisplayPort In to HDMI Out should be perfectly fine.
I just realized I have such cable in my desk (brand new), DP to HDMI 4k 60fps
My spouse need something for the other way around for his desk setup
Those specs sound like HDMI 2 anyway. HDMI 2.1 can do 4K @ 144Hz with HDR. Or apparently even 10K @ 120Hz.
But the big thing with HDMI 2.1 is the cec protocol which doesn’t translate over an adapter unfortunately. But it is a very tiny thing most people won’t care about.
Would be cool if they put one in the box. Would save many sad christmas days as you wait for Amazon to come round with an adapter.