DTS only transcoded to 2.0 channels

It worked flawlessly until an LG WebOS update for the LG C2 models

I’m not sure you can put the blame on LG.
The way Plex handles surround audio transcodes was already questionable.
Like how it uses AAC (see this and this).
And the bug that forces video transcode when using audio transcode and subtitles at the same time, even if there is no need for that.
Also things seem to be working fine for me outside of the Plex app on my LG C2. The problem is just that the webos plex client only plays 2 channel audio, even if the plex server is showing it’s transcoding 5.1 audio to 5.1 audio.