Well, Valve has limited resources.. I have a Steam Deck and I can tell you that as far as dithering is concerned, this is completely dependent on the amdgpu driver which doesn't currently have a switch for it. Will it come one day? Maybe, but not today.
So, as it is for handheld, LCD is usable, OLED is not (many complaints). Then as for desktop mode, the kernel version # makes a difference because the driver is in it and then the DE version because the compositor changed between the KDE 5.x series and the 6.x series. I didn't like their most recent (very bugged) 3.7 release so I rolled back to 3.6 which is fine to use in desktop mode. Not AS nice as my Win10 Intel igpu setup, but entirely usable.
If you want to just play around with it, just install Bazzite.. it'll give you the same SteamOS UI for gaming mode which uses its own wayland compositor. Desktop mode on SteamOS is regular x.org. If you don't care about that option being present then you can use any distro and any desktop to experiment with whether wayland or x.org. There is nothing proprietary in the drivers Valve uses. They do commission patches or extensions, but they aren't exclusive to Valve as they get entered into the mainline of projects.