Small garage HT conversion .. leave ceiling open?

An open rafter ceiling with the right kinds of insulation will certainly act as an acoustic absorber and can have a positive benefit with the right amount and placement of the materials. Don't ask me for details I don't know.

An open rafter ceiling with hard surfaces will somewhat diffuse the sound (good) but depending on the placement of speakers and angles of the surfaces may focus sound in listening locations and blur the dialog or confuse your ears on the location of sounds.

Of course an open ceiling offers no sound isolation.

Making the room larger with no ceiling means investing in more subwoofer horsepower to get the job done.

Its only about 2 ft above from 8 ft where i would close it off if i put a sheetrock ceiling in to peak of open ceiling

In theory your sub(s) will do better closed off with less cubic feet to fill.