MacBook Pro (16" 2019) Does Not Recognize Correct Resolution

Solution 1:

There is an ongoing bug with Big Sur 11.1 and 11.2 where

USB-C ports to fail to recognize external monitors, rendering external displays unusable and unable to connect. This appears to be affecting both DisplayPort and HDMI displays connected directly and through hubs and adapters.

and

The second issue results in resolution issues with external displays unable to work at a full 4K 60Hz resolution, instead locked at 30Hz. In some cases, a 4K monitor is only recognized as a 1080p monitor.

So far there doesn't seem to be a fix from Apple.

Solution 2:

Confusingly, it does appear to be wire related. I found my original USB-C to USB-C cable which came with the monitor and it resolved the issue.

EDIT (26/03/2021): I spoke too soon. The issue has occured with this cable as well. However, as noted by Luciano, it appears to be a known bug by Apple and will therefore be resolved in a future release.