I couldn't seem to get it to work either. I just turned vsync back on cus I want that sweet 5K.
The game sets the refresh rate to 60Hz in fullscreen mode, which can cause it to tear if you disable V-Sync.
NVIDIA seem to have changed how G-Sync works, and you no longer need to disable V-Sync in most games. (just check your monitor's 'FPS' Counter)
V-Sync only seems to control whether the screen tears if the framerate exceeds the refresh rate now.
It's not that G-Sync isn't working, but since Bayonetta is setting the refresh rate to 60Hz, and the framerate is capped at 60 FPS, disabling V-Sync causes it to tear.
I don't know if all G-Sync monitors have this, but mine has a "Turbo" button which overrides the refresh rate set by the game and switches it back to the maximum.
If I hit that, it switches back to 100Hz G-Sync rather than 60Hz G-Sync, and the tearing disappears.
Playing the game in borderless/windowed mode also prevents this from happening, since games generally don't change the refresh rate in windowed mode.
You may have to restart the game the first time after switching from fullscreen to borderless/windowed mode for it to work though.