For a more detailed explanation have a look here under “Which passthrough formats are supported by OSMC devices (not all are supported by all devices) and which of them can be passed through via S/PDIF or HDMI?”: Audio setup and information
For a more detailed explanation have a look here under “Which passthrough formats are supported by OSMC devices (not all are supported by all devices) and which of them can be passed through via S/PDIF or HDMI?”: Audio setup and information