It doesn't. Tone mapping requires a quite powerful GPU (or fast processor) which the RPi4 doesn't have and also this isn't implemented in Kodi yet. Mapping 720p or maybe 1080p might be possible but 4k most certainly is way above the RPi4's capabilities.
So, stay away from HDR media if you only have SDR displays or recode it with tone mapping on a PC.
Ok, it's sad. So, if not the RPi4, then any other box running LibreElec or CoreElec could do tone-mapping better ? Lots of HDR stuffs are there and I dont want to buy any HDR display soon.