Second monitor goes black after direct graphics controller direct output mode enabled

@Kells  Based on your description, it sounds like a driver issue of some kind, possibly one that hasn't been resolved yet.  Are you running the latest NVIDIA drivers from Dell or from NVIDIA?  If you're using Dell drivers, try getting the version from NVIDIA if it's newer.

But in terms of the operation and wisdom of that BIOS option itself, you don't necessarily need to have the NVIDIA GPU take direct control of the display outputs just because you're using a multi-display setup, and the drawbacks may outweigh the benefits in your case.  The Intel GPU in that system can run 3 total displays all on its own, each of which can be up to 4K.  The NVIDIA GPU can run 4 total displays, and is capable of running displays up to 8K, but are you running 4 total displays or display with more than 4K resolution?  The NVIDIA GPU is also capable of supporting technologies like VR, G-Sync, and Adaptive V-Sync, and DisplayPort 1.4 (rather than 1.2) -- none of which work when the Intel GPU controls the display outputs.  But are you using any of those technologies?  If not, you might want to think about just leaving the system in its default mode, because that BIOS option causes the NVIDIA GPU to take control of even the built-in display.  That means the NVIDIA GPU has to stay running all the time, even when you're running on you're not connected to any external display and nothing graphics-intensive is going on.  That will reduce your battery life, and probably increase heat and fan noise a bit.  So unless you actually NEED some of the capabilities offered by the NVIDIA GPU that aren't available when the Intel GPU controls the outputs, you may want to consider switching that BIOS option back even if a driver update fixes your current issue, since the default operation allows the NVIDIA GPU to be disabled when its performance isn't actually needed.  (Unfortunately this system doesn't allow you to have the Intel GPU control the built-in display and have the NVIDIA GPU control only external displays.  The Precision 7000 Series systems allow that setup, and so do some Lenovo systems, but not the Precision 5750.  This is actually the first Precision 5000 Series system that allowed the NVIDIA GPU to directly control ANY outputs.  Previous generations had all outputs wired to the Intel GPU with no ability to configure that.)

@Kells  Ok, I did realize there is one benefit to having the NVIDIA GPU control the outputs in your case.  You're using a 4K 60 Hz display connected via USB-C (the display doesn't support TB3).  The only way to run 4K 60 Hz and USB 3.x data over non-Thunderbolt USB-C simultaneously is to have a source system that supports DP 1.4.  When using DP 1.2 over USB-C, the only way to get enough bandwidth for 4K 60 Hz is to limit USB speeds to USB 2.0.  If you run DP 1.2 and USB 3.x simultaneously, you'd only be able to run 4K 30 Hz.  This has to do with how USB-C works.  So if you're using the USB ports built into your display for devices that benefit from USB 3.x speeds, then there's a benefit to having the NVIDIA GPU control the outputs.  But if the USB devices you have plugged into the display only need 2.0 speeds, then you may want to consider the default Intel GPU setup again.  (You may also need to adjust the USB-C Prioritization setting on the display itself to have it operate in the desired mode.)

On a side note, hopefully you're not relying on the display to provide power to your Precision 5750.  It will, but the display doesn't support providing 130W, which is what your system requires for optimal operation.  The display only provides up to 90W, so if you rely on that as your power source, your system will attempt to adapt to the reduced power budget by reducing its battery charging speed and its performance, especially when the NVIDIA GPU is active, which it will always be in your setup.  Using an undersized power source seems especially bad with that particular system, since it's apparently designed to drain the battery under heavy load even when connected to its normal 130W power source, according to this article.  So apparently even the 130W power source is undersized for that system.  I'm guessing Dell couldn't push more than 130W over USB-C (which is already over the 100W max of the USB PD spec) but didn't want to include a traditional AC adapter connector.  So this is the solution they came up with, which they call "Hybrid Power".  I call it "shipping a system with an undersized power adapter and expecting users to accept unnecessary wear and tear on the battery and throttled performance when the battery level is too low to keep draining it."  But my term admittedly isn't as catchy.

@jphughan  thank you very much for respond.

Right now Im using NVIDIA drivers (latest), and my system is up to date. According to question about GPU capabilities (VR,G-sync,dp 1.4 ...) - right now Im only just using my UP2720Q where it may not be needed - but im planning  to expand monitor setup with one more - with more hertz, so I wanted to try this GPU nvidia setting out. I wouldnt mind the less battery life since Im always plugged in with charger. Also I heard that when GPU is in control of outputs it may increase the performance ? Im not sure about that. Although this is professional laptop for work - I use it for gaming from time to time, since is has enough power to run them. So It may worth to try it with gpu in control.

About the UP2720Q - It does support TB3 - you probably was talking about U2720Q which dont have TB3. https://www.dell.com/en-us/work/shop/dell-ultrasharp-27-4k-premiercolor-monitor-up2720q/apd/210-avbp/monitors-monitor-accessories this one is mine - you may find the thunderbolt port in connectivity option.

And yes - Im not relying the power supply on the monitor - Im also using 130W charger which I got with my laptop - so there should be no problem with power in this case.

@Kells  Happy to help, although I apologize for the confusion because you are absolutely correct that I was thinking of the U2720Q.  I missed that you had a UP2720Q, which is indeed capable of Thunderbolt 3, as you say.  In terms of that setting, if you see a performance increase, it would probably be related to running an application that doesn't support NVIDIA Optimus very well.  That is the technology that allows the NVIDIA GPU to do the rendering work and pass through an Intel GPU, which is what happens when the Intel GPU controls the display outputs.  In that case, cutting the Intel GPU out of the equation can improve things.  But Optimus has been around for quite a while now, so most applications support it just fine.  But if you're aware of the possible downsides and want to experiment, then that's completely understandable.

In terms of the issue itself, if the display works as expected in the default mode of the Intel GPU controlling the outputs and this behavior ONLY occurs when doing certain things on the display, I still think this is a driver issue of some kind, or MAYBE a firmware issue, but I doubt it.  So if you're already current, then you might just have to wait for another update.  Maybe a recent update broke something.  I remember a case where an Intel GPU driver update broke 5120x1440 resolution, so everyone who had those displays was suddenly limited to something like 3840x1080 unless they rolled back to an older driver release.  And in fact last week my own system suggested updates for Intel and NVIDIA drivers.  I installed them, and my system immediately started blue screening multiple times per day, even during the night while I was asleep and the system had all of its displays on standby.  I rolled those back and it's back to being completely stable.  So a new driver may have CREATED a problem that now needs to be solved.  However, going back and testing old driver versions to see if that avoids the problem would be tedious, so if having the Intel GPU in control avoids this issue and doesn't create any other problems for now, you might want to stick with that configuration and retest this mode when newer drivers have been released.  Good luck, and sorry again for the confusion on display model!

@Kells  For that error, check Thunderbolt Control Center and confirm that the display is listed and is shown as an approved device. If it’s still pending approval, it’s possible fir the display to receive a video signal but not have a PCIe link open, which would prevent USB data from flowing. If that looks ok, try connecting a USB device to a USB port on the display. Does your system detect that device? If so, then you definitely have a USB data path open to the display. If it doesn’t show up, you would have to troubleshoot that issue, and if you can fix that, you might also fix the firmware update issue.

@Kells  Ok, sounds like it might be a bug in the current firmware updater then.  I remember the Thunderbolt controller firmware update for the Latitude 7400 had a bug for a while that caused the entire system to lock up whenever you ran it, so this type of thing can apparently happen.

@Kells  That would be my guess.  Of course it may be a narrower problem condition.  It might only be triggered when being run from certain system models, or certain BIOS releases, or certain TB3 controller chips or firmware revisions, etc.  Without more data points, it's hard to say, even assuming that this is a bug in the firmware updater at all.  But if you want to report this, I would suggest creating a new topic for this in the Monitors section of the forum and including your system model, BIOS revision, and TB3 controller firmware version (which you can check in Thunderbolt Control Center).  Another thing you could maybe try would be temporarily disabling Thunderbolt support in your BIOS entirely so that the USB-C ports only work as USB-C ports.  If the display is backward compatible with regular USB-C ports, it should still work (although possibly only at 4K 30 Hz if it tries to continue running USB 3.x data rather than USB 2.0), but that might allow the firmware update to work.  If so, that would be a useful data point to include in your problem report as well.  And then of course you could re-enable Thunderbolt on your system afterward.