With the G2, I was recommending different NVidia CPL settings for Motion Smoothing:
This is post #2 in the topic
With the Index, I still keep: Low Latency ON | Threaded Optim. ON | Vertical Sync FAST
Using Max Performance can lead to lower fps because you can hit the GPU Temp Limit faster and make it throttle back more often. This requires a good temperature control (i.e. fans and air flow or liquid cooling). Using Optimal Power instead makes the GPU adjust the power consumption the closest to sustain a certain perf vs temperature/power, contributing to stabilizing the perf and reducing stuttering as a side effect (flat graph vs saw tooth) but also gives a higher average fps over time. Given how this setting is working, I’d recommend you’d use Max Perf. on 2D with GSync, but Optimal Pow. in VR.
Like you’re saying, this is meant to tell whether the application would be using discrete or integrated GPU. And even if you do, the application can be exporting two functions with a special name (1 for AMD and 1 for NVidia), which the discrete video card driver detects automatically in order to render on the discrete GPU instead of the integrated. I believe this mechanism also overrides the Windows setting.