[psysfaction]

While I have a receiver with HDMI, I'm sure there are still plenty of users with older receivers that are limited to optical/coax surround. If you eliminate passthrough, you're forcing them to PCM stereo or reducing their quality (and increasing CPU usage) but having to decode AC3/DTS to multi-channel PCM and then re-encode back to AC3. Dropping or repeating video frames or AC3/DTS audio frames as was done on the older versions seems preferable if it doesn't happen very frequently (as is the case on Haswell or never Intel hardware that have very accurate a/v clocks).

You did not understand the problem. Until 16.0 PVR needed pre-buffering of streams which did not work well. Buffer level was set to a default that was too small for many systems. Increasing that value made others complain because channel switching times increased as well. The problem with real-time streams is that (as the name real-time implies) they come in with the same speed as they play. Means that buffers won't fill once playback was stated. This resulted quite often in a stalled audio stream, buffering, etc. I don't call this good quality.
Now VideoPlayer starts a realtime stream as early as possible and observes buffers levels. If the stream is about to run dry, it changes playspeed slightly and buffers will fill again. This is not possible when doing passthrough.

This I find a very ingenious solution since I often have problems with live streams since internet in Indonesia is not very constant. I can get decent speeds when I download form my abroad server but for live streams I mostly get problems. This new way of changing play speed could solve the issue.

As long as passthrough still works for all my ripped blurays then I'm more then happy.
I am currently building a new home cinema with Atmos and would think it would be a pity to not have passthrough since it is the only way to send the metadata for Atmos to the AVR.