Hi Club Ricky, I got pretty familiar with this end of last year after getting very annoyed with Plex on my Sony Android TV (KL-43X8305C) transcoding everything to 2.0 stereo as you say. Had the same issues with my FireTVs too…
What it boils down to is that Plex doesn’t have it’s own player client, it uses the device’s default player. If the device doesn’t have DTS, AC3 or other 5.1 decoding properly implemented you can’t get it through Plex. End of. No amount of fiddling will resolve it.
Kodi (v16.1), VLC, Emby, etc all get around device limitations because they have their own players or hacks. So all other apps working doesn’t mean it’s actually Plex that’s not. I’ve experienced this first hand with Kodi on my Sony, v16.1 would play any of my HEVC videos with DTS 5.1 no problem. Kodi updated to v17 where they’ve ditched the custom player workaround (http://forum.kodi.tv/showthread.php?tid=289735) and that was it, DTS broken, no more surround sound.
My Sony is running 6.0.1 and Kodi will now play AC3 5.1 directly, but not DTS, even though this version of Android’s API SHOULD support it. Sony, sadly have a long running rep for bad implementation.
I’m using Kodi 16.1 on my Fire TVs with Plex for Kodi Addon installed and that works flawlessly. It’s not a perfect solution but I get HEVC and DTS all direct playing without any fuss and that’s the main thing for me.
From what I’ve seen on here the only box properly implementing Android’s API for surround sound is the NVidia Shield, which I’m considering getting at some point so I can get back to using Plex directly, but the family is pretty locked into the Amazon ecosystem, so the FireTVs may stay for a while yet.
Really what we need is Plex to support 3rd party players or to implement their own on Android devices to ensure device restrictions don’t interfere with the experience.