I also have the same problem you described: AFMF doesn't work correctly for me either—lots of tearing, artifacts, and stuttering, making games unplayable. And it's the same with AFMF 2.1 released today, although I feel it's a bit better, there's still a lot of tearing, and it's still unplayable.
I have a 7900XTX XFX, Ryzen 7 7700, Windows 11 23H2 on a Sony OLED 4K 120Hz TV. I ran the same tests as you, and nothing works...
I also think there's an issue with VRR synchronization, but what exactly? However, I bought Lossless Scaling, and it works great; games become super smooth! But it only works in Windowed Mode, so not all games...
How is it that third-party software can do better than AMD? It's outrageous! I reported the issue using the tool in the drivers to AMD, and I hope they find a solution, but I doubt it... I'm afraid my high-end hardware might be incompatible with this technology. It's pity !
But if someone have a fix, please tell us what to do !