This refers to post processing, such as any of the Dolby Prologic II or DTS Neo choices. With this switched on it will only decode the Direct audio format that's received.
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Main HT <> 976 <> 7200 <> Ultra-X12 <> sapphire ST2 mkII RF/LF <> sapphire SC center
sapphire ST2 mkII SBR/SBL <> sapphire SS SR/SL <> Verizon/DVR <> Vizio M70Q7 <> Oppo UDP-203 <> Amazon 4k Fire TV