It fools the same people who somehow think toslink audio quality is worse over a bitperfect link

No one's saying it didn't transmit the data bit perfect, but it re-encoded the media at a relatively low bitrate with a decently crappy codec which is where the crappy audio came from.

EDIT: Looking closer at the wiki (it's been forever since I saw it used), it's when it's being used for surround sound that it compresses it super poorly, for stereo it's just PCM and sounds fine.

I wish I could dismiss that as a joke, but I have in fact seen some of those.