Windows 11 What is the default state of this system toggle option

Yes—if you mean the Windows “Variable refresh rate” switch in your screenshot, Off matches Microsoft’s published default for this OS feature. It does not necessarily mean G-SYNC, FreeSync, or Adaptive-Sync is disabled. Microsoft says the switch adds compatibility for DirectX 11 full-screen games that do not support VRR themselves; it augments, rather than replaces or overrides, the normal display and GPU-vendor VRR configuration.

If you want that extra compatibility, keep G-SYNC, FreeSync, or Adaptive-Sync configured normally, then go to Settings > System > Display > Graphics, expand Advanced graphics settings, and enable Variable refresh rate. The option appears only when Windows detects a VRR-capable monitor and compatible graphics driver. Leaving it Off is therefore normal and is not, by itself, a fault. One limitation: the screenshot confirms the Windows setting, but it cannot prove the PC maker’s exact factory image or whether an upgrade retained an earlier preference.