The Loki is a completely separate USB DAC that only supports DSD and also functions as a pass-through for an existing DAC when you're not using it.
So when listening to PCM your signal chain is:
(whatever your DAC is) -> Loki (passthrough, does nothing) -> Amp -> Cans
When you want to do DSD it's like this:
Loki -> Amp -> Cans
While doing DSD your other/normal DAC is still plugged into the Loki but isn't doing anything and the signal is being ignored, so it has no effect on the sound (nor does its sample rate).