I've been checking this issue and believe it is working exactly as designed.

If you set the default Input Mode to Dolby D and then input stereo PCM the 950 will process the stereo input in one of the Dolby (stereo) surround modes (ProLogic types). If you change the processing mode to "Stereo" you are also changing the default Input Mode to stereo and then when playing a Dolby D source the 950 downmixes the 5.1 to stereo. If you have the default Input Mode set to any true surround mode it will auto switch between surround modes.

I don't like it, but I believe this is by design.