Following the recent experimental discovery of a new polarization conversion phenomenon in polarization volume gratings (PVGs), in this paper, we investigate its underlying physical mechanisms in cholesteric liquid crystal (CLC) reflectors and PVGs. We examine the transition of eigenstates from circular to linear polarization as the incident angle deviates from the helical axis, which originates such an anomalous polarization conversion effect. While this transition enables PVGs to double the in-coupling efficiency and brightness uniformity in waveguide-based augmented reality (AR) displays, it also degrades the polarization selectivity and alters the transmitted polarization state in both CLC reflectors and PVGs, which in turn narrows down their spectral and angular bandwidth in the multi-layer design. These findings help not only deepen the understanding of polarization behaviors in CLC-based optical elements but also provide valuable insights to optimize their performances for emerging AR smart glasses.
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