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JTL from what I understand dithering is used to replace missing colors correct? If the source is 8 bit why would the chipsets in consoles force dither? Even if it is set to on by default there's nothing to dither right? What is it going to dither a 8 bit source to a 8 bit colors? Doesn't add up to me. Say the source was 6bit then it makes sense that some sort of dithering is used to simulate higher bit depth. I don't think any modern games are encoded outside of 24bit true colors, aside from hdr capable games, as that has been the standard for a long time.
The other source of temporal dither can be a monitor that's not true 8 bit being fed a source that is 8bit.