The music says it all when you listen vs previous firmware. Just like Hi-Res streaming on or off has an effect on the Walkman App. The built-in 360 reality audio has an effect on the walkman app 100%. I'm not complaining though....my 2 cents.
It's just that 360 Reality Audio is not something which converts already existing FLAC/etc. audio files, but the song has to be specially made like that.
Saying otherwise is basically contradicting Sony itself. I would say that they know a bit more about their technology than us.
All info is available on their page: https://www.sony.com/electronics/360-reality-audio
As it says in the picture (from this Sony page), the song has to be specially mixed with their tool. That means taking every separate bit of the song, like individual voices/instruments/etc., assigning them to objects into the 3D sphere, and then doing additional things, like moving those objects around in that sphere, if they want to.
Again, saying that 360RA has any conversion capabilities, that enhances things in already normally mixed songs, is contradicting Sony.