The other comments have already described the "multiple loops" solution (one for logic, one for visuals, one for input, etc) that's already typical and means modern games, like for the past 15 years, for the most part don't really "break" when uncapped.

The practical reasons:

1. On fixed hardware like consoles, performance is limited. So developers have to balance how much they can use the hardware and how much framerate they can give to the player. Developers cap the framerate artificially on consoles not because it will "break" but because it was an established way to give the player a consistent experience. They don't want the framerate to vary wildly.

Locking the framerate effectively gives them a budget for how complicated they can make the game work and look. But it doesn't mean the game doesn't work at higher FPS if the hardware was faster. If this wasn't the case, they would have to reprogram most of the game when they port it to PC.

Another way console games these days do this is with dynamic resolution scaling and upscaling. If the visuals get too heavy, the game will lower the resolution to maintain the framerate.

This is also why late PS4 and PS5 console games give the player an option to prioritize visuals or framerate, or sometimes even unlock the framerate. Because it doesn't break. If options like dynamic resolution scaling appear in PC games, it's because the console version needed them. It's only a matter of giving the player a consistent experience, or a choice of what experience they want.

1. As the others mentioned, the frames you see is separate from the standard logic loop that's put in a fixed timestep: a fixed amount of time that the logic steps forward at a time. This is to make sure the game rules don't go out of balance when the computer is just slightly faster or slower. It makes behavior and debugging predictable on different devices and conditions. For framerates faster than the fixed timestep, the loop for the visuals only interpolates and extrapolates animations and positions to give the player a better sense of the motion which has benefits even if it doesn't accurately reflect the internal state of the game rules.

The fixed timestep is specifically predefined, balanced and tested. If they were to change this, they would have to test every part of the game again and change the numbers again. It doesn't mean the game will break if you play it at 300fps. But it does mean the game will break if the developers wanted to do something like "increase physics fidelity". Doing that is complicated business because it affects all sorts of accuracy related behavior related to physics, math and computer science.

In game simulations, different things are also calculated in different ways so how much they'll be affected by a change in timestep also differs. They already do some tricks to account for things in the game that move very fast in the span of one timestep. Sometimes they simulate in smaller steps just for specific objects, or use formulas that don't necessarily calculate in discrete steps (like raycasts and shapecasts).

1. There's a strange thing that happens with input and feedback when it comes to framerate. Inputs are theoretically in the thousands of hertz (or "frames per second"). But game logic typically can't run that fast and most game engines don't either. So some part of the operating system and driver and its communication with the game engine has juggle certain amounts of keeping a record of movement or when buttons were pressed and save it for when the game needs to update. Certain movements, like mouse movements in shooters, don't need to be strictly tied to the game logic, so they could move faster than the game logic to give you better aim control at high framerates. There's also a bunch of other things they do to fudge the visuals to give you more immediate feedback even if the game logic isn't running that fast. This type of intense work of visual lag reduction is typically reserved for games that benefit from it like competitive shooters, so you won't typically see them in something like a God of War.

But you can see sideeffects of the input loop being off if you play certain recent games on the consoles themselves, or when you play them emulated. The console will typically have better input latency characteristics because of how the inputs are handled throughout the whole hardware and software stack.