Sound bar connection problems

You say the TV is connected by arc to the sound bar. What is arc? Perhaps that is the problem. Is there a way to connect the sound bar directly to the TV?

With the newer Xbox update, the option you're looking for (Bitstream out) has been simplified and changed to just Speaker audio. You can find this by going to Settings > General > Volume & audio output, and then you can select which type of audio you want the Xbox to push out instead. The type of audio available to you will depend on the hardware you have plugged in to the Xbox.

Also, can you confirm specifically which model Xbox console you're using, as well as the TV model?

In the meantime, for an Xbox One console (either the Original Xbox One, Xbox One S/X, or Xbox One Digital Edition), you will want to connect the digital audio wire directly from the console to the sound bar, following the directions found here: Connect your Xbox console to a sound system | Xbox Support.

I may be able to provide better troubleshooting once I have the details.

Has anyone tried to connect their sound bar to a non ARC HDMI port and see if that fixes the problem?

Does the sound bar have an optical connection? You could TRY connecting the Xbox to sound bar directly (pretty cheap cables on amazon) and see if that rectifies it...

Optical is by far the best audio connection method. I think you may be confusing this with what you have called "coaxial" as this is the primary input method for most modern sound bars. I could be wrong, but it seems more likely.

As for the AUX, that's only really added so people can plug in iPods and phones etc. Of course, there's nothing to stop you using that method for your TV but it's not usually the reason it's implemented.