You are using an optical connection now? Sonos reports what it receives, so I’d look at the projector - why is it sending PCM instead of Dolby Digital (that could also be 5.1)?

Forgive me if this is entirely wrong, I'm just starting to figure out this stuff.

The optical connection comes out of the hdmi switch (which is supposed to support 5.1). Does that not mean it's bypassing the projector? My projector is a BenQht2050a which does not support 5.1 or audio passthrough as far as I'm aware. I thought the optical connection going from the switch would bypass the projector.

FYI - HDMI switch: https://a.co/d/ac6U95A

Thanks, for your explanation. So the question is why is the Shield not sending DD.

Have you tried changing the EDID mode on the switch? Certain modes appear to restrict audio to stereo.

Yes, it was set to the setting that was meant to function as "Copy the EDID out of HDMI OUT 1" then I switched it to the EDID designated as "2D 1080P 5.1 CH (LPCM/Dolby/DTS)".

Neither worked.

Are you sure the source is being broadcast in 5.1? 

Tested on multiple different inputs and videos including Kodi streams that specifically said Dolby Digital, Dolby Atmos, and 5.1 audio codec was provided.

When I set to automatic audio output, my Shield automatically turns on Dolby Digital and DTS which I assume means that the problem is with my hdmi switcher? Even though it supposedly supports 5.1, perhaps there is an issue in how the shield passes off the audio to the switch which causes it to automatically downgrade to stereo?

Im at a loss to be honest. The audio portion of my set-up was not something I focused on before beyond having a sonos beam before I got gifted the rest of what was necessary for 5.1. Simplest solution to upgrade to something like the OREi hda935? Although it's not currently available in Canada.

Maybe just to double check, can you connect a source direct to tv and Beam? That may help to isolate where the problem lies?

I tried using two other TVs which both had an ARC hdmi. Connected to sonos beam and still had the same issue. The sound worked and the Sonos app changed from SPDIF to HDMI, but still Stereo output.

I’m confused. The Sonos app doesn’t have the ability to change a format. The speaker (the Beam in this case) plays what it is handed. Which was called out by ​@106rallye in his second response. 

I’m with ​@nik9669a and ​@106rallye , in this case, I suspect the issue is your NVIDIA shield isn’t sending the correct format to either your HDMI switch ( and then along via optical to the Beam) or to the TVs involved. 

I meant the app displayed that it was updated to HDMI being the input and stereo still remaining the output. Not that it actually was used to change the input/output.

Anyways, just got it working now in Kodi by updating the Kodi audio output settings to "Enable Dolby Digital (AC3) transcoding". Didn't know that wasn't selected and needed to be.

Still not working on Netflix, but I can do without that (unless anybody has a simple fix). My NVIDIA shield is set to have audio output sent as Dolby Digital. 

Just to clarify, for anyone reading this thread at a future time:

The Sonos app simply reports what it’s receiving. SPDIF and HDMI are input connections, not audio formats. The app will report the audio format it’s receiving - eg Stereo or Dolby Digital. The Beam cannot convert formats, so the format of the audio input to the Beam is what matters, and hence my suggestion above. 
 

I’m glad you’ve got something more useable now, ​@Dnydam.