FarlyI already explained on a video why black crush is happening.
I want to give some insight to the support team at Asus (if they haven't figured out this yet, though I doubt it), is that this black crush issue is probably because of HDR10+ display this phone has. I compared the video playback quality on my Samsung A5 2017 (has AMOLED screen) and my ROG Phone 3 by playing the newest Batman trailer. The black on my A5 is fully black (meaning the OLED went off) while on ROG it was grey, and probably because the display's showing whole lot of color, that it detects the grey color instead of black. I was wondering if the HDR can be turned off while playing video, I prefer if there is an option to turn it on/off. It was really disappointing that a flagship phone like ROG 3 has inferior video playback quality compared to my old A5 2017.
While at it, the screen refresh rate should be capped at 60 fps, because why would you watch videos on 144hz anyway. The video we're viewing is capped at 24, 30, or 60 fps, so there's no need for high refresh rate on video playback.