- Edited
I have some updates after a couple days of tinkering. All of the following is for Asus Rog Zephyrus G14 laptop.
I did a clean install of Windows LTSC, and did not install any display drivers. Using the Microsoft Basic Visual Display driver, I noticed no issues with temporal dithering. Unfortunately there were too many compromises with this approach including not being able to connect external monitor and losing audio synchronization while watching videos.
So I reluctantly installed the AMD and NVIDIA display drivers. This caused immediate discomfort like the original experience with the default OS. So I can rule out any possible benefit by going from Windows 10 Home to Windows 2019 LTSC.
Next test was to check settings for one driver at a time. I disabled the NVIDIA driver and added some registry values at HKEY_LOCAL_MACHINE\SYSTEM\ControlSet001\Control\Video{2D2A7876-F8BF-11E8-A4F6-848B33DFC0AC}\0000:
"DP_DisableDither"=dword:00000001
"Embedded_DisableDither"=dword:00000001
"HDMI_DisableDither"=dword:00000001
"TMDS_DisableDither"=dword:00000001
I also changed DitherAlgo6 from "3" to "0"
Unfortunately the results were inconclusive. There may have been some improvement but I don't know if it's a placebo effect.
I then installed the Iris app to control brightness and blue light. This definitely helped reduce eyestrain quite a bit. I am using 50% blue light reduction, and 50% brightness reduction and also using the "clear type" fonts. I am fairly certain the font types play a big role in reducing eye strain, and I am going to experiment further with that.
Finally, I found out that the USB-C port on the laptop is connected directly to the NVIDIA graphics and bypasses the AMD processor completely. Note that the HDMI port and the built-in laptop display both HAVE to go through the AMD processor. So I disabled the AMD driver and enabled the NVIDIA driver. Using the USB-C port with my decade old Dell monitor seems to be working quite well.
I am still frustrated but this seems to be quite promising. I will test this configuration for a couple of days and update here.