Incorrect. It may have better results from some speakers than others and some amplifiers than others. But I have yet to see a time when it doesn’t benefit stereo listening. For movies only, it might not matter. But for music if you can, you should. It’s not going to make things sound worse.
I don’t think the OP should be worried about the different modes on their receiver just yet. Sounds like they need to make sure they have everything connected correctly and properly placed first, then go though the settings in their receiver and make sure that it knows what they have and where they have it.