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Xbox Support
https://support.xbox.com/en-US/help/hardware-network/display-sound/choosing-speaker-audio-output#:~:text=Connect%20your%20console%20to%20your%20TV%20using%20the,out%2C%20you%20can%20select%20one%20of%20these%20formats.
Razer Insider | Forum - Optical audio Bitstream out or ...
https://insider.razer.com/index.php?threads/optical-audio-bitstream-out-or-dolby-atmos.44267/
Optical Audio - Bitstream Out Bitstream format - Dolby digital Headset format - Stereo uncompressed Are correct. These will change automatically with extra settings applied. As with just these alone you will not (again in my opinion) be getting the best from this product. As further adjustments are needed.
What setting is better for optical audio output on Xbox ...
https://www.reddit.com/r/xboxone/comments/2nwy1z/what_setting_is_better_for_optical_audio_output/
With optical you need to set it to bitstream out for true 5.1 audio. Stereo uncompressed is sending a stereo signal to your sound system, which your surround system then mixes across all your speakers. That is not ideal. Bitstream will send 5.1 to your system, and your system will pump out glorious 5.1 surround sound exactly as intended.
Separate bitstream format options for HDMI/Optical on Xbox ...
https://answers.microsoft.com/en-us/xbox/forum/all/separate-bitstream-format-options-for-hdmioptical/a69abf35-6030-45f5-8a32-afa410148526
It seems the Xbox One X can only output one bitstream format at a time if you enable both HDMI and optical audio output. What I don't understand is why there is no way to configure HDMI and optical separately. For example, if I don't want to use my Astro A40 Mixamp Pro, I'd like my HDMI audio bitstream format to be DTS and not DD.
Xbox One X Audio settings - stereo uncompressed or bitstream
https://answers.microsoft.com/en-us/xbox/forum/all/xbox-one-x-audio-settings-stereo-uncompressed-or/9e0778a4-4ec7-49a0-89b4-d5a94050030f
Additionally, try to connect the console to the soundbar via optical TOSLINK cable, and use Bitstream via optical cable to get surround sound from the soundbar. If the drop outs disappear when the console is directly connected to the soundbar via optical cable or HDMI in instead of ARC, your TV might be the culprit. As for the "best" setting:
Bitstream vs. PCM for Audio – Which Is Better?
https://hometheateracademy.com/bitstream-vs-pcm/
Bitstream and PCM are capable of producing the same audio quality, and the only difference is how your setup decodes the compressed file. Compatibility with devices and supported frequencies are bigger factors to consider than sound and transmission when choosing between PCM and bitstream. Also read: 2.1 vs. 5.1 vs. 7.1 Surround Sound
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