I personally CAN CONFIRM that X Box One X, set with HDMI to TV and Optical to BOSE SOLO 5 (same Dolby Digital only support as Sonos) CAN TRANSCODE DTS TO DD 5.1 in The fly.
Audio option HDMI Bitstream
Bitstream DD 5.1
Deadpool Blu ray that has only DTS OST
X Box trough HDMI to TV
TV via optical to soundbar
TV LG OLED B6V that has 5.1 passtrough
As a counter proof I set Bitstream to DTS and resulting audio was mute.
This is X Box one X but S is The same.
Hope this can help
X Box one X DTS to Dolby
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At The same time I’ve also tested same things with PS4 PRO, that does NOT convert it. I have to set PCM to hear a DTS OST even if I set Bitstream Dolby to PS4.
Let us know how it goes.
Virtually yes. Pratically since my personal test I haven’t found a 100% confirmation... someone say yes, someone say no. I definetely say: “YES THEY (X BOX ONEs) CAN
But I've not had any issues with gaming either, and I know that if my TV were delayed too much, that would be a major issue (I would be responding to something I see, but I'm seeing it x milliseconds after the console actually sent that frame of video; and then I don't see the result of my action for that same x milliseconds, so I make a correction too late, etc. etc.)
And I also do plenty of streaming from my Xbox. While I have a Smart TV, I actually have it connected to a separate network than most of my other stuff. I don't necessarily trust Samsung's device security, which is why. So I stream stuff from my Plex server through my Xbox instead of using the TV's built-in Plex app. I also use the Sling TV app on my Xbox, since Sling doesn't have an app for Samsung TVs yet.
Xbox audio set as Bitstream Dolby and TV set as DOLBY output also. Into “my Sonos” it says DD 5.1. Perfect!!! It sounds awesome!!! Welcome to me to The Sonos world