In the Audio Output settings you have 4 options. 1) TV 2) Optical or HDMI ARC 3) Home Cinema via HDMI 4) Custom
If you select option 2) MTS2 transcoding is greyed out and set to on. If you select option 3) MTS2 transcoding is greyed out and set to off. If you select option 4) you can decided yourself if you want MTS2 transcoding off or on. What is the point of option 4? If option 2 has it on and option 3 has it off, what else is on/off/active/inactive/whatever if you have MTS2 transcoding either off or on via the custom option? It's not clear to me. Does my question make sense?