There are several areas in which the NVIDIA driver lacks feature parity between X11 and Wayland. These may be due to limitations of the driver itself, the Wayland protocol, or the specific Wayland compositor in use. Over time this list is expected to shorten as missing functionality is implemented ...
Wayland has a bunch of features that are so new they aren't in the stable distros yet.
Nvidia went from declaring they were never going to support Wayland to trying to force their own EGLStreams stuff on everybody to reluctantly accepting the standard that was developed without them and trying to make it work for their driver. They're playing catchup and it's entirely their own fault for refusing to cooperate with anybody.
They're moving more towards open source drivers now, probably because the people buying billions of dollars worth of GPUs to use on Linux servers for AI training have had words with Nvidia on the subject.
reluctantly accepting the standard that was developed without them
Not with everything, Nvidia stood still on explicit sync, in that case it were the idiots at Freedesktop that were massively blocking Wayland's progress, trying to force an inferior technology, which Nvidia did not want to implement.
Yeah, but what works? I just plugged my AMD GPU in my PC running Bazzite and it was my best experience ever with a PC. But I want to know what is AMD working on, specially if it has to do with the RT / HDR / color management areas.