Considering that the human eye can not determine single frames above 80hz and can not perceive a framerate above 220hz, a 500hz framerate is a waste. Give us a quality 240hz display and call it a day.
It's been around a decade since i looked into the research on this topic, and I believe the limit is in the ~200 Hz range as you said. But it is worth mentioning that it's situation dependent and even to some extent varying between individuals.
The most important takeaway though, is that human vision is much more perceptive to smoothness of motion than to detecting individual frames. So while having >60 Hz is certainly useful, the frame rate consistency is even more useful. Years ago, I conducted an experiment of rendering at ~60 FPS (on a 60 Hz panel) and having stutter in ~1-2 ms range vs. <0.1 ms, and the difference was easily noticeable. So in order for higher frame rates to be useful, the computer needs to be able to produce the new frames with a higher precision. The reason why high frame rates are advantageous is not because details may appear earlier on the screen, it's mostly because it's easier for the brain to filter out what is actually moving. And stutter is the worst enemy of this, as it distracts the brain when processing the image. I know I'm fairly sensitive to stutter, and find it quite straining.
So 500 Hz is not just wasteful because people can't see the difference, it's also a bad idea because it cuts the tolerances for frame rate consistency in half, so you can get to a point where the picture becomes noticeable worse. At 500 Hz there is only 2 ms between frames, and with the precision in the Windows scheduler you will struggle to keep a good consistency at these rates.
But I believe no one has addressed the biggest elephant in the room; can games even produce unique frames at this rate?
Modern game engines work at a fixed tick rate, and if you render frames at a higher rate than this, the GPU will just render multiple identical frames, rendering the 500 Hz screen utterly pointless (pun intended).
A few years ago, I remember CS:GO had 120 Hz tick rate (30 Hz server), and 60-100 Hz was fairly typical. I haven't checked the most recent games, but I doubt there are many running at >120 Hz.