In my case, source direct, the only thing it does is bypass all tone controls, bass management and processing of any kind regardless of analog or digital. You are hearing the source as unaltered as possible, and that means poor DACs will come across as just that, so "pure direct" may not be a good thing in every case. My receiver also cascades all the DACs (3 per channel) when in stereo via a digital feed for a very detailed yet smooth sound, so I mostly listen to redbook via digital.
In nearly all cases, the multichannel analog input is a dedicated source selection on the receiver, so that one is ALWAYS a different input. Using the multichannel inputs, you can also listen to stereo material, so you are covered.
The Oppo is a $200 player, I would not expect world class DACs. The 803 is a nice receiver, and as I said in my first response, I can almost guarantee that the 803's DACs are better.