Audio Passthrough on FireTV 2-But not what you think

I have been struggling with an issue, but I don’t believe it is actually an issue with Kodi. I just wanted some clarification

I have attempted 2 setups with completely different results:

1st Setup:
Amazon Fire TV 2 w/ Kodi 16.1
Toslink Audio extractor
Yamaha DTS receiver
Results: No audio artifacts, but no audio sync because of inherent lag of TV. My older receiver lacks digital audio delay settings

2nd Setup
Amazon Fire TV 2 w/Kodi 16.1
HDMI to TV
Toslink output from TV
Yamaha DTS receiver
Results: Audio dropout every few seconds or loud audio white noise effect. This is well documented in forums as an issue with audio passthrough on android. Not really complaining.

However, I was having a hard time understanding why I was getting different results. I think I understand the issue. I would just like some confirmation.
People who were experiencing the audio dropout or white noise effects were having signal compatability issues.
It was probably working for me in the 1st setup because my older receiver and the FireTV/extractor were compatible.

When I passed the audio through my TV, the TV is not a passive extractor. It is processing and then delaying the audio. This translation was creating an audio signal that was no longer compatible.