stekusteku already gave you all the important references.
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OpenXR Toolkit Motion Reprojection settings are just a shortcut to OpenXR for Windows Mixed Reality Motion Reprojection settings
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“Reprojection mode” in MSFS currently does not relate to Motion Reprojection at all and submitting depth has no impact on Motion Reprojection with Windows Mixed Reality (and probably all other vendors too)
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The other form of reprojection, that I called Spatial Reprojection in my other post, is always on regardless of any setting. That form of reprojection is only useful for compensating movements of the headset, and it does not account for motion in the scene (which is what Motion Reprojection does)
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Your headset is always generating frames when you don’t hit frame rate, either through the use of Spatial Reprojection alone, or through a combination of Spatial and Motion Reprojection together (when enabled)
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Without Motion Reprojection, your head movements will still feel smooth at a lower frame rate thanks to the always-on Spatial Reprojection, but the overall scene still looks juddery. With Motion Reprojection, both head movements and scene motion are propagated in the future, creating a truly smooth experience.
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The “Reprojection mode” in MSFS only provides additional information useful for Spatial Reprojection, in order to correct the perspective of the reprojected frames even more.
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Motion Reprojection always comes at the cost of quality, since Motion Projection is about predicting the future, a science that is very difficult to nail down.
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There are many factors that affect the quality of Motion Reprojection, such as your GPU, the overall system performance, but also greatly, the actual content (some content is much harder to predict than other, in particular fast motion, or things with transparency, or UI). Not too much you can do about that.