Onkyo receivers do in fact have the Dolby Surround upmixer as well as the DTS Neural:X upmixer. Like other brands, they also include their own silly DSP modes that I personally never use.
There are no upmixed signals being streamed online. Signals are upmixed by processors and receivers and a few other devices. Some devices decode and convert the Dolby Atmos/DD+ signal and it is output in an LPCM container with Atmos metadata intact(Dolby MAT.) This is how the Apple TV 4K and XBOX Series X/S deliver Atmos.
Microsoft’s Dolby Access app is a piece of s#%t that, in the case of the XBOX Series S at least, forces the upmix of non atmos tracks when selecting Dolby Atmos for home theater(HDMI Only) for output. Even if turning the upmix option off within the app, it still forces the upmix and the signal making its way to the receiver will display as Dolby Surround and one could apply the Dolby Surround mode to it for redundancy’s sake. Just a mess.
This behavior by Onkyo receivers is not too head scratching when considering new speakers and configurations. Gone are the days of mono signals at the sides being diffused by dipole surround speakers up on the wall above ear level. Surround speakers, when configuring for Dolby Atmos, should be direct firing speakers at or slightly above ear level. So, Onkyo sends surround info to surround back channels when selecting a “Straight” decode of Dolby 5.1 signals using a 7.1 configuration I think for reasons
@Mike Up hit upon.
Now, this behavior is not unheard of in the sound processing world. Consider behavior by Marantz when selecting “IMAX DTS” mode while playing a DTS 5.1 signal. Like Onkyo and Dolby 5.1 signals in a 7.1 configuration, surround channel information is sent to surround back channels. I’ll stick with my 5.1 and height virtualization configuration for now.
It’s far less fussy with sound modes than other speaker configurations.