You seem to have missed that the A16 doesn't yet decode DTS or Auro 3D. DTS will come as a firmware update if and when DTS-certification has been achieved. Auro 3D is less certain, because there is also the problem with the conflict between Auro and the decoding chip manufacturer.
So for Dolby Atmos you must use bitstream out of the oppo. For legacy Dolby formats up to 7.1 you can choose bitstream or decoded to multichannel LPCM. For DTS you must use decoded to LPCM.
You're absolutely correct. I apologize for my relative illiteracy about the A16 as I still haven't even looked inside the manual and didn't pay super-close attention to discussions here regarding initial firmware release limitations. But now that you bring up 8-channel DTS I do remember seeing that it would not be initially supported. And so for that you are absolutely correct I would need to let the Oppo continue to decode.
Turns out my newly acquired second (used) UDP-203 is arriving today. So my mind has been working over exactly what I will redo at the viewing/listening location where the A16 will go, and how I will place things in the equipment rack. This is currently not a 4K TV location, but rather a 1080p Panny 65VT50.
I think it's finally time for me to remove my JVC HM-DT100U DVHS VCR which I haven't used in many years (I actually still own two, having sold my third some years back), a leftover from my old digital VCR taping days when my cable company still used Motorola-infrastructure DVR's that supported firewire interface to DVHS machines. This has now been replaced for me by modern DVR technology, and in particular for me implemented through Windows Media Center, Ceton cablecard-enabled 6-tuner TV card and Hauppauge 4-tuner OTA/ATSC TV card, four Linksys DMA2100 extenders to feed four HDTV's around the house, and 8TB of recording storage capacity. And I really do need the cubbyhole in my equipment rack for the new UDP-203, so that replacement here is what I will do.
Also, I've decided to keep the BDP-103 just where it is. It is currently fed through its two HDMI inputs from two DMA2100 extenders (supporting the two HTPC's I have that each run Windows Media Center for HDTV) for the Panny HDTV in this room. So these two external HDMI inputs provide 720p/1080i content. The 103 does a fantastic job de-interlacing 1080i, as well as up-converting 720p/1080i to 1080p for delivery to the TV. So I'll just leave this as is. I will also leave its audio output set to LPCM in order to support all current conventional 8-channel codecs, which may or may not currently be supported yet by the A16 in bitstream mode. And the 103 will continue to be set to "split A/V" mode with HDMI1-out video going to HDM1-in of my AVR and HDMI2-out audio going to HDMI1-in of the A16. I will also continue to use the 103 for playing conventional 1080p BluRay and DVD discs with conventional 8-track audio.
The new UDP203 will go into the cubbyhole formerly occupied by the JVC DVHS VCR. It, too, will be configured for "split A/V" mode but with audio output set to bitstream. HDMI1-out video will go to HDMI2-in of my AVR and HDMI2-out audio will go to HDMI2-in of the A16. So the 203 will support any Dolby Atmos discs I happen to play, even if at the moment I don't have a 4K TV to complement it. But someday I will make that upgrade in which case the 203 is already in place (along with my AVR which already supports 4K).
My Roku Ultra will go to the one external HDMI input of the 203. This will allow me to pass through the 203 all forms of streaming content from the Roku, including content with Dolby Atmos audio, and still deliver video through the AVR and audio through the A16. The Roku does not support Dolby Vision video content, but since I don't have a 4K TV yet at this location this is not an issue at this moment which requires an immediate solution.
This configuration also supports non-headphone listening through "party mode" of the AVR which feeds my two speakers around the TV, since audio from all sources goes through HDMI1-out (and hence to the AVR) when the HDMI2 device (i.e. the A16) is sensed in a power-off/standby state. So simply by turning off the A16 I now facilitate audio/video from HDMI1-out of either Oppo to the corresponding HDMI input of the AVR, and implicitly also from any of the three external HDMI input sources connected to the two Oppo players. So I can listen to sound through speakers instead of headphones if I want to. And I do NOT have to pass-through HDMI into and out of the A16. I simply need to feed audio-only to the A16 and use it (for any source) when I want to listen through headphones.
As far as placement of the A16 in my equipment rack, I currently have my A8 sitting on top of a DBX 14/10 EQ (for 2-channel audio analog tone control when listening through stereo speakers), in a cubbyhole that is actually tall enough to accept the A16 2U unit instead of the A8. So that's where it will go.
Connect things up with a couple of new HDMI cables, and I believe I'm good to go. I should have this up and running by tonight, once the new 203 arrives.