On PS5 when VRR is enabled in 120hz mode the screen will flash black every few seconds. It can take a minute or 2 to start doing this but it always does and doesn't stop doing it.
This doesn't occur if you're not in 120hz mode and also if you're in 1440p because the PS5 doesn't currently support VRR at that resolution. You'll have to force it to 1080p with VRR on to duplicate. It is consistent across all games and even occurs in the home screen menu once it starts doing it. I have a ticket with TCL since May, they reached out to tell me they successfully replicated the issue but didn't have a fix or know the cause.
Also since you mentioned Xbox... Here's a quirk I've noticed between the 2. You're correct, 1440p mode works fine on Xbox including with VRR. Interestingly though you cannot use HDR in 120hz 1440p on Xbox with this TV. This is supposed to be a bandwidth limitation with HDMI 2.0. Here's where it gets weird though. On PS5 you CAN use 1440p+120hz+HDR and it works fine(once you toggle your way past the line issue).
For anyone interested I think the update to 11.5 on the TCL R635 just fixed the PS5 VRR 120hz mode flicker. I just tested it with Horizon and Tiny Tina's and didn't encounter anything except perfect VRR for a few minutes as the TV adjusted itself to match the frame rate.
Test it out! Note you have to force your PS5 to 1080p to use VRR+120hz otherwise your PS5 will stick itself in 1440p and currently PS5 doesn't support VRR at that resolution. You do this in the system settings.