Only sound on the 2 Front Speakers with 5.1

Yes I can confirm this - Xbox output is 5.1 where only the 2 front speakers have sound. Thats no issue of your soundbar.

Greetings

the reason it does not play thru the rear speakers on 5.1 is that the song does not have any rear channels set to it.

you will notice when your playing a game in 5.1 you will get most of your sound from the front 3 speakers - when you have sound behind you your back 2 speakers will produce sound depending on where its coming from.

with the settings set to Digital Stereo - it will play thru all speakers at a certain level - usually all speakers the same from each.

you should be able to leave the XBOX set to 5.1 - and on your Panasonic Receiver change the sound setting from 5.1 to one of the other settings- just switch thru them for the best option for when you have music playing.

then when you game / watch movie - switch the receiver back to 5.1

I have opt'd to bypass the router and redirect the sound back to the receiver but now I am having an issue getting 5.1 sound. the redirect works for the video and does not complain about the HDCP 2.2 but I am only getting stereo sound from the front 2
speakers. The question I now have is how to I tweak the TV audio optical settings?

No, the Xbox One S does not simulate ATMOS from a 5.1 source.

However, since the Xbox One can run multiple sound applications at any given time (for example you run an Atmos enabled game, while having a music app running in the background), the console will ALWAYS output an ATMOS signal to your receiver, since the
game sound is in spatial surround.

Into that ATMOS spatial surround sound track, the stereo music track will be mixed in. But since the music track does not have surround or height information in it's stereo signal, you won't get the music in ATMOS spatial surround, even if your receiver
shows ATMOS coming in.

If you watch a 5.1 video in VUDU, the Xbox will distribute the 5.1 sound information to the front, center, back surround and subwoofer channels for the ATMOS signal, and your ceiling speakers for example won't get sound.

So even if your receiver shows ATMOS, and you have twenty speakers mounted in your home cinema, only the standard 5.1 speakers will produce sound, if you watch a 5.1 sound source.

You need to select bitstream audio over HDMI, not 5.1 uncompressed. The optical cable you are running from your TV to the amp can only carry compressed surround sound, like Dolby or DTS. Optical cables only have the bandwidth for uncompressed audio in
2 channels, aka stereo. If your TV is only sending the front speakers out of the 5.1 mix, that would be why you hear all kinds of background noise and not people speaking. Picking either DTS or Dolby should solve this problem.