8 bit vs 10 bit display:
Coming from the TV world, As an example of why this may not matter -- The 2015 Sony 75x940c has an 8bit screen, however, between dithering and the Full Array Local Dimming backlight, the screen produces some of the best HDR images possible.
The iPhone X is an OLED, and is capable of true 0nit black, and almost 700nit white, a wide color gamut, and contrast which far exceeds HDR requirements. Without a doubt, the screen is capable of producing respectable HDR.
Re Youtube / Google VP9.2:
Google has unfortunately been very customer unfriendly here. As an example again using the 2015 Sony 75x940c. This screen was sold for ~$7000 when new, and was the flagship Sony TV at the time. It was the best "Android TV" money could buy. It is clearly capable of beautiful HDR with Netflix and Amazon. The screen supports VP9, but apparently google didn't think it was important to make sure that the VP9 decoder chips could handle VP9.2. Google didn't think it was worthwhile to make sure to support HDR on a top-of-the-line Android TV. As far as they are concerned, this is the consumer's problem, not theirs.
With that said, it's not impossible to imagine that one day Youtube HDR will be supported on the iPhone X ... The CPU is more than capable of decoding VP9.2 in software, but it's hard to guess what google is going to do. They might not want to have reduced battery life for software decoders. They might not want to support it at all on an iPhone. They might want to try and force VP9.2 support (so they can obsolete it in a year with VP9.3). They also might decide to give in and support H.265 like everyone else.
Also, Netflix did a major study comparing VP9.2 to H.265, and found that ultimately, H.265 is a superior codec. Google is just being cheap to avoid paying licensing fees.
As much as I am annoyed by a lack of a feature, I think Apple is 100% right here by taking a stand with Google on VP9.2 support. A major part of why video has flourished so well in recent years is because everyone agreed to the same standard: h.264.