1. Well, since a DAC stands for Digital to Analog Converter, and the coax outputs digital, by definition it bypasses the DAC.  
2. At fixed output, it will be bit perfect.  At variable output, it will not be bit perfect due to volume and/or tone control changes. Neither mode involves resampling. 

Thanks for the reply. 
 

regarding point 2, I’m coming from streaming Apple Music from the Apple TV. The Apple TV resamples everything to 48kHz. This is not good for music as that’s 44.1kHz. 
 

does the port do that on digital out or just leave it alone?

It streams whatever the source is.  You could capture the output and write it to a file, and the output file would match the input file exactly.  

So your saying we are not in store for a 20 page rant of “Sonos Port not bit perfect” in our future?

No, and apparently the problem with the Connect was fixed a few years back.  Of course, nobody noticed the fix.  

Of course not

You mean people didn’t come on and thank Sonos?  Really?

I have just read this review of the Sonos Port and they say that if you set the digital coaxial output to variable, the sound is worse than when you set it to fixed or even worse that the digital output of a Connect which is also set to variable. Is this by design or something that can be fixed with a firmware upgrade?
https://www.techhive.com/article/3546333/sonos-port-review.html