I've had a Quest 2 since launch with a RX 580, 6600 XT, and RTX 3060. It was absolutely terrible on the 580 (muddy compression, higher latency) and was notably worse than a CV1.
With the 3060, I was able to do HEVC with Air Link at 200Mbps with good quality, low latency, and AVC with wired Link was also decent. Oculus benchmarks and sets the highest 3664 encode resolution with both. No driver issues either; I installed the latest driver and was good to go. 90Hz and 120Hz worked fine.
With the 6600 XT, HEVC with Air Link is only possible with certain driver versions (notably 21.10.2), and even then, bit rates either aren't set properly, or AMD just isn't that good at handling that even (200Mbps HEVC looked about as good as 50Mbps AVC). The encoder in any case can't handle 120 FPS seemingly at any encode resolution (encoder FPS is 100-116).
VR with AMD is largely mixed or broken for the last 5 driver releases now (May preview, all "4" 22.5.2 drivers, and 22.6.1). AVC is broken (Oculus logs spam something about it), Oculus Dash gets visibly broken (ghosting). And I remember with Polaris (580) where they outright broke VR for 4-6 drivers back starting with 20.10.2, and even today the recommended driver for Polaris is still 20.10.1 back from Oct 2020. And even with all the reports about VR and encoding being busted, none of this is mentioned in driver release notes. None of the last 5 current driver releases even hint at VR being broken.
I've debugged this since the Q2's launch and can say with confidence AMD is not an ideal choice for VR with a Quest 2, and likely all headsets with an encode/decode process (Vive Focus, and Varjo Aero even though they outright claim they don't support AMD GPUs). You have to deal with driver and encoder issues. You can make it work and it's
tolerable, but it's worse than anything you can pull off with NVIDIA. Driver-issues aside, RDNA2's encoder capabilities aren't as-good as Ampere. Even though a 6600 XT performs better than a RTX 3060, the encoder is notably worse, and the GPU encoder is the main factor as to how VR will feel and look with encode/decode headsets.
For direct-display headsets (CV1, S, Index, Reverb), AMD is fine.
Does anyone know if the Rift S uses h.264?
It's direct-display (no encode/decode)