I have used Kensington thunderbolt 4 dock, but all TB4 dock should work since all of them are exactly the same from reference design. Also any TB3 dock that is using DP1.4 with Titan Ridge chip. Such as HP’s TB3 dock. Some dock like Plugable won’t work since they hardware limited the bandwidth on DP 1.4 for absolutely no reason. And yes, it only support 1 monitor since TB3/4 full bandwidth is 40Gbps. TB3/4 is just tunneling the DP signal, it shouldn’t be the reason why it work. I am also running 4K120Hz without the dock by connecting the DP-> USB C cable to my MBP.
LG UltraFine 5K and XDR is using 2xDP 1.2 signal tunneling through thunderbolt. It’s a entirely different mechanism. DP 1.4 alt mode is utilizing USB’s quad lane, hence 8.140.8 (overhead), DSC on the other hand I am not sure how that work with lane / tunneling USB C signal, since 4K144Hz require DSC to work without reducing the to 4:2:2 color.