It was difficult to understand why at first. Star Wars: Squadrons was one of the first backwards-compatible titles to receive a patch that unlocked 120Hz support on Xbox Series X and Series S but remain locked to 60Hz on PS5. Soon after, Call of Duty: Warzone (which is still a backwards-compatible title as a standalone download) was patched with the same features, and again 120Hz was only missing on PS5.
It wasn’t until Psyonix, developer of Rocket League, updated its popular multiplayer game that things became clearer. Rocket League exhibits the same behavior as Squadrons and Warzone, but Psyonix has opened as to why. According to the developer, it’s down to Sony only allowing 120Hz support for native PS5 games, and not PS4 ones running in backwards-compatibility.