Diagnosis
That's exactly what it's supposed to do, and why many gamers turn it off. Adaptive Contrast (sometimes called DCR or Dynamic Contrast Ratio) dynamically adjusts the backlight brightness based on the content on screen, trying to make darks darker and brights brighter. On fast-paced game scenes, it can't keep up, causing the backlight to pulse and creating that blotchy, crushed-black look where detail is lost.
How to Fix It
For competitive or consistent gaming, my advice is to leave it off. 1) Press the joystick to open the OSD. 2) Go to the Gaming menu. 3) Find the setting for 'Adaptive Contrast' (it might be under a sub-menu). 4) Set it to Off. 5) While you're there, also check that 'VRB' (Visual Response Boost, the backlight strobing feature) is off unless you're specifically trying to reduce motion blur and understand the trade-off in brightness.
If That Didn't Work
If you still notice poor dark detail or a washed-out look in shadows, the issue is likely your in-game brightness/HDR settings or the monitor's standard contrast setting. Go back to the main OSD Picture menu. Adjust the Contrast (try between 70-80) and Black Boost (start at 0 or 1, increasing it slightly only if needed to see details in dark corners).
Heads Up
Features like Adaptive Contrast and Black Boost are trying to compensate for the inherent limitation of an LCD panel: it can't produce perfect black because the backlight is always on. Turning these off gives you a more consistent, predictable, and often more detailed image, even if the absolute blacks aren't as deep.