Yes, yes. Which means any Room Correction, Volume Levelling, Equalisation, etc. that you do want to do, you have to do in your AVR. Which means that you miss out on using a lot of the nice functionality in MC. Also, a lot of people on this forum think MC can do a better job of audio processing than many (most?) AVRs.
As I said above, I am no longer a fan of Bitstreaming. It used to be the way to get the best sound. It no longer is.
Bitstream - send the raw digital audio without processing (decoding or further DSP) - which is then sent to a Digital to Analogue Converter, either a stand alone unit or one built into an AVR, as in your case. When using an AVR, any DSP processing is applied before converting to analogue using the internal DAC.
PCM - the player (MC) will convert the raw audio - to a digital audio stream, and do it as well if not better than the decoder in your AVR, then apply any DSP required, and then send it to a Digital to Analogue Converter, either a stand alone unit or one built into an AVR, as in your case.
If you don't think you need to do any processing on audio, how have you done Room Correction for your speakers? Do you do any Volume Levelling between or within tracks or video? But I'm not going to evangelise MC processing versus Bitstreaming to an external device to process audio, but I suggest you search for some threads on Bitstreaming around here.
Regardless, there seems to be some issue in MC with Bitstreaming 2 channel AC-3 audio. That should be addressed.