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To put it simple, fps is generated by hardware and without limit it can generate as much as hardware allows. Screen has only refresh rate but it doesn't limit hardware with fps. Your Steam Deck can generate more than 90 fps but oled screen can show up to 90 fps.
The display will show a frame every certain period of time. Some displays have a fixed refresh rate (60 Hz, say), and will display a frame every fixed period of time (16.6 ms, say), whereas others have a range of rates they can display at (Variable Refresh Rate) where the timing of when the display draws a new frame can vary frame to frame. The Deck's displays aren't VRR, but they do let you configure which fixed refresh rate you want to use within a range.
No display can draw a complete frame more frequently than its maximum refresh rate (that's what maximum means, after all). So the question is what should be done when the game is generating frames faster than the display can show them. Since it takes some amount of time to scan out the frame onto the display ("reading from the frame buffer") one option is to have the game just keep writing to the frame while it's being displayed - the top part of the display will show one frame and the bottom part of the display will show a different, newer frame. This is called tearing. Another option is to synchronise the frames generated by the game with the frames shown on the display (vertical synchronisation) so that you always see a perfect frame. Whether the game should keep generating frames that will be thrown away without being displayed, or should only generate frames that will be displayed, are also implementation options. Different people are going to make different choices in different contexts about which they prefer - faster frames vs better looking frames vs battery life.
The default Deck options of frames that are synchronised to the display's refresh rate (whatever that might be) with the game not generating frames that won't be used (capped framerate) provides the best looking gameplay with the lowest battery life, which is a sensible choice for the Deck's use case. Other contexts (competitive twitch shooters on mains power, say) may find an optimum elsewhere, but the Deck isn't going to be the best choice for that context anyway.
So, for your specific question, if you uncap the frame rate, you are spending power generating frames that will never be displayed. If you also enable tearing you will see parts of some of those frames inserted into other frames.