[wrxtasy]

I have meant AC3 and Dolby Digital means the same. So in your second quoted statement it seems contradictory, as if it supports DD passthrough, it wouldn't need to be converted to PCM. Or what am I missing here?

Yes you are missing something, the audio tvOS options I just outlined above. Please read them again.
All - AC3/DD or EAC3/DD+ IS decoded to multichannel PCM - IF the "Use Best Available" tvOS audio settings option is selected, no matter which App you use.

That is the master audio selector option.
If an audio receiver supports 5.1 DD only, I believe it's assumed that it might also handle 5.1 PCM audio too.
If not then just select the Change Format > Dolby Digital - tvOS audio option.

It really is "set and forget", just don't overthink it !