Dynamic HDR switching with AMD should work just fine - but only in fullscreen, and it requires you to activate 10bit D3D11 presentation in the madVR settings.
4GB is a good idea. Can't say much about performance. AMD has some problems to run madVR's NGU scaling algos quickly, for some reason, which could be a reason to go Nvidia. Maybe this will be solved in a future driver or madVR version, but I can't say for sure. It's not that AMD can't run NGU at all, though, it's just somewhat slower than expected.
Choosing a faster GPU never hurts, there may always be new algos added in a future madVR version which consume additional GPU power. But then, selling your GPU and replacing it with a faster one is one of the easiest hardware upgrades, so it doesn't hurt to start with a budget GPU.