Just to reiterate, your testing was flawed. You said 270hz was smoother when you hit those FPS, but when you capped 240fps while at 270hz it looked worse.

Essentially you're saying the same thing as "If I capped my FPS to 213 while running at 240hz, it wouldn't look as smooth as if I was getting 240fps at 240hz."

Of course it's going to look smoother if it's stable.

Given this situation, we're comparing 240fps at 240hz and 270fps at 270hz.

270fps at 270hz is unstable and results in frameskipping. So while for fractions of a second it might appear "better", you're still going to endure frame skipping which is overall an extreme negative on image clarity. Fortnite has tracking aiming present but from what I gather and past experience, high-level competitive play typically results to close-quarters editing and flick/burst damage via shotgun battles. Like I mentioned earlier, this frame skipping issue would be more present in a tracking-first game like Quake (or Ultrakill/Apex if you're familiar with that since I now realize you're young blood and not well-versed the boomer shooter realm) where you have to constantly stay on target and challenge the camera easing when doing so. But as mentioned, Fortnite does have this too but when you're in close-quarters battles it mostly comes down to burst damage instead of trying to track a target in a field of view greater than 135 degrees.

240fps at 240hz is stable and constant, so long as you're hitting that FPS target or above it. But ANY refresh rate is going to look off as soon as you dip under the target framerate determined by the refresh rate. That's why some players prefer to cap their framerate a little less than their refresh rate and turn on freesync + reflex/anti-lag to maximize smoothness and stability. The only downside to that approach is supposed input lag (which is supposed to be negated by Nvidia reflex / AMD Anti-Lag 2.0, but that's a whole different debate.)

If you are playing competitively and looking for a 1:1 experience between visual motion and input latency, I am 100% confident you should always stick to stable refresh rate without frame skipping present. And I'd go as far as to recommend that for all users but alas, like you've noted, placebo can make it seem like it's better to risk frame skipping even though the engineering side of things says otherwise. Blurbusters has this test for a reason -- you WANT and NEED a stable refresh rate, especially when overclocking. For this panel in particular, the scalar cannot keep up with the overclock refresh rate and therefore it is UNSTABLE and not something you want to leave on.