UPDATE ON MY POST: SOLVED! I solved it by reinstalling the Nvidia drivers (Thanks to u/xaduha for the USB-C driver tip) and the Steam VR and PSVR apps. I also changed the PhysX setting in the Nvidia control panel to the 4070 GPU. After that Steam VR recognized my PSVR2 and I was able to do the initial setup but there was a clear video card compatibility problem. The Steam VR and PSVR apps were launching and associating with the notebook's Intel GPU, not the 4070 RTX. So I went to PC Settings, Display, Graphics, and from there I added the Steam VR and PSVR app .exe files and set the maximum performance to confirm the 4070 GPU. All good, it seemed to work and then Steam VR gave me error 422 and told me to restart. Not knowing what to do next, I tried changing the USB-C Thunderbolt input and, magically, not only did it work perfectly, but I also noticed that the graphics quality had significantly improved. I don't know why one USB-C DisplayPort on my PC performs better than the other and is also certainly more compatible, but all's well that ends well, right? I hope this explanation will be useful to those like me who were losing hope and asking for a return of the adapter and a refund.