@waveSounds I had a talk with both Lotoo and Tidal support.
Lotoo said they are aware of this issue and are working on a potential Firmware fix.
However, it seems Tidal is the one who will do it. Here is their full response after my support ticket was transferred to the technical team.
"Our developers are currently working on making a bit-perfect feature for the TIDAL app to recognize more and more devices.
At this time, it's very limited and we are working to expand it to more and more devices.
Your current DAC is simply not integrated for it currently, but we have forwarded the request to see it added as we work to improve this new feature.
They do recommend in the meantime using an app like the UAPP app in the meantime as it helps provide the bit-perfect rate between TIDAL and your DAC if you're having any trouble streaming bit-perfect with your current set-up.
We appreciate your understanding as well in the meantime while our team works further on making this possible through the mobile app itself. "