Essentially, there is a fixed list of CE modes in CTA-861 and that list might grow in the future. There is no rule that decides whether a mode is CE or IT except that list. I think we should only have one source of truth (i.e., the kernel) for what is a CE mode and what is an IT mode, otherwise we could end up in a situation where someone is running an old GNOME that thinks a particular mode is IT together with a new kernel with an updated list of CE modes.
However, this would leave the question of how to deal with old kernels that don't report CE/IT at all. We could simply depend on the kernel reporting the mode type and not expose the property in the UI on old kernels, or we could expose the "Automatic" option on old kernels and leave the user in the dark about what "Automatic" means for their selected mode.
Is there any recent activity to bring this to DRM core? I quickly skimmed dri-devel but didn't find anything.
I did work on the kernel side of this a few years ago [1]. I also had a working GNOME implementation that broke after some changes in mutter and I never got around to fix and upstream things. I am glad to see that someone else finally submitted a MR. :-)
An (in my opinion) important thing that I had in my kernel branch was to communicate to userspace whether a mode is considered a CE mode according to CTA-861. Otherwise there is no way for userspace to tell whether "Automatic" effectively means "Full" or "Limited". UX-wise it would surely be better to leave out the "Automatic" option from the settings panel if we know what "Automatic" actually means.
In case you agree I can try to update and upstream my kernel branch so that we can finally fix this long-standing mess. :-)
[1] https://github.com/pp3345/linux/commits/rgb-quant-range-v2/