I could be wrong but I'm pretty sure windows isn't doing the up mixing. None of the "Spatial sound" options are enabled in the control panel for the MC WDM driver or the final output which is set in MC to ASUS Xonar DX ASIO interface. Setting it to WASAPI makes no difference. Setting exclusive mode makes no difference. I can visually see the sub channel playing full frequency output within MC DSP looking at the Analyzer. So it is happening before the the final output to windows or the soundcard.
My "work around" of setting the WDM driver to 7.1 doesn't work perfect either I noticed... but better. When I set WDM to 7.1 I'm leaving MC DSP set to 5.1. Doing this and playing an external 2ch source like youtube video in a browser or song in foobar2k, I don't get the sub issue but JRSS isn't engaging. I know this because I get the same 2ch on the final output but without the sub issue.
(Green Working as expected)Stereo source, "Detect stereo sources in surround" checked:
WDM 2.0 DSP 5.1 = no sub problem, JRSS working
WDM 5.1 DSP 5.1 = sub problem, JRSS working
WDM 7.1 DSP 5.1 = no sub problem, JRSS not working(not detecting stereo source in surround?)
WDM 5.1 DSP 7.1 = sub problem, JRSS working
Stereo source, "Detect stereo sources in surround" NOT checked:
WDM 2.0 DSP 5.1or7.1 = no sub problem, JRSS working
WDM 5.1 DSP 5.1or7.1 = no sub problem, no JRSS as it's not checking for stereo sources
WDM 7.1 DSP 5.1 = no sub problem, no JRSS as it's not checking for stereo sources
It appears the problem only occurs when "Detect stereo sources in surround" is checked and WDM is set to something more than stereo(2.0). You can't leave the WDM driver set to stereo only because then you loose 3.1 channels of any 5.1ch external source.