OK, drumroll... the Sound Blaster GC7 DOES, I repeat DOES decode Dolby and then do SXFI for consoles. Via SPDIF in only. Tested on Xbox One S, and I also tested Dolby Digital out of my LG OLEDE65P SPDIF out. Dolby light goes on, SXFI light remains engaged. Huzzah!
Didn't actually try gaming to "test" it (haven't turned on my Xbox in ages so Warzone has like 5 gajillion GB updates before I could play, just scrolled around Netflix and the menu basically) but I see no reason why it wouldn't just sound like typical SXFI, since it is decoding to multi-channel PCM and then layering on the SXFI goodness, just like it does with SBX.
So, this is a pretty cool feature actually for this particular device. Creative you have sort of redeemed yourself!