Most everyday content is indeed created for sRGB. If that content is shown on a wide-gamut monitor without color management, the same RGB numbers can produce more saturated colors than intended, so images and games can look exaggerated.

An sRGB mode typically makes the monitor behave more like an sRGB display by restricting or remapping its wider native gamut to the smaller sRGB color space. That’s why things look more “normal.”

A better long-term solution is proper display profiling/calibration. In practice, you create an ICC/ICS profile so the computer and color-managed software know how your monitor actually reproduces color and can translate image data correctly for that display. Without that translation, wide-gamut screens often oversaturate sRGB content.

The monitor’s gamut is mainly determined by the display’s physical color-producing system—especially the backlight/filter/panel characteristics—while the electronics and firmware can limit, remap, or emulate a smaller space such as sRGB.

If you want accurate color, use a hardware colorimeter and profile the monitor. Color-managed applications can then display images much more accurately than simply relying on switching monitor modes.