Right, so each of the 4K 120 Hz is 1 display, because it doesn't need DSC, and the 4K 240 Hz counts as 2, so 1+1+2 = 4, which doesn't exceed the max limit, so it's allowed.
It's 120 and 240 times 1000/1001 which is a standard value for historical reasons related to the transition from monochrome to color television in the US.