Thanks for the information. The TV settings are fine. My LG is configured the same.
If you enable PGS subtitles in the Plex LG app, Plex Media Server will transcode the video. This is a limitation of the Plex LG app. There is no workaround. Furthermore, the transcoded video is not HDR. The Plex LG app has always had this limitation.
Plex added HDR to SDR tonemapping as a beta feature to Plex Media Server late last year. This capability is not yet fully supported across all operating systems or GPUs. It a beta feature, which means it may not work in all situations or may cause problems when enabled. It is also very CPU intensive.
In theory, your CPU & GPU are strong enough. In practice, I’ve no idea what will happen, as I’ve no experience with the feature (I run PMS on a Synology NAS, and tonemapping is not yet supported on that platform).
You might experiment with disabling HDR to SDR tonemapping and hardware accelerated transcoding to see if that helps (Settings → Server → Transcoder).
The real fix:
As previously mentioned, if you want to watch 4K HDR movies with PGS subtitles in 4K HDR, you cannot use the Plex LG app. You must use an external device such as a Android TV box, Apple TV 4K, Roku, or a Home Theater PC.
I have an Nvidia Shield Pro and an Amazon Fire Stick 4K. Both direct play 4K HDR video with PGS subtitles enabled. The Shield has better audio support (TrueHD & dts) and works well with home theater setups and high end soundbars. If you use TV speakers or a lower end soundbar, then the FireStick could be a good fit.
The Apple TV 4K and higher end Roku devices also support 4K HDR video. I’ve no direct experience with either and do not know how well they handle PGS subtitles.
A HTPC may be an option using the recently announced Plex HTPC client. Plex HTPC is still under development, and may or may not fit your needs. The announcement thread has links to additional information including where to download the early release versions.