Copy paste of my reply:
Hey!! I have this same issue, this applies to VRChat
With it off, "Decoder queue" likes to make this sawtooth pattern as its latency rises then resets over and over.
When the game is at a high fps: this setting works fine.
But when fps drops: it causes 80 or 75 fps to feel like 30 or 40.
Steam vr motion smoothing is off.
When i turn off "Optimize Game Latency" the sawtooth latency pattern is visible in game but everything is a lot smoother
you can see this pattern in the statistics tab live when you change the option
Specs:
Windows 11
Intel i9-9900k (stable oc to 5.10GHz)
2080ti (11GB)
32GB (4x8 ram 3200MHz)
1TB NVMe SSD
VRChat installed on secondary 2TB NVMe SSD
Other info:
Using Quest 3 over link
120Hz
client framerate will have negative framerate spikes, more when "Optimize Game Latency" is on
No other issues to my knowledge.
Screenshot Link + Attatchment: (Off vs On)
https://limey-is.me/8ULcIlycIzJo/direct