The optical output on TVs is only intended for the inbuilt TV tuner. They have never been intended for audio pass through.

It just so happens that some TVs (Panasonic are one I know for sure that do, the old Pioneers didn't) pass through some audio. It's not always exactly what goes in the HDMI port though.

What you are finding is that the TV is probably converting the 5.1 audio via the HDMI to two channel for its stereo speakers. It's then passing that two channel stream back out the optical port. You're lucky it's doing that - some TVs don't send anything but output from the inbuilt tuner.

They seem to work surround sound wise and most receivers seem to pick up the audio as old Prologic type surround sound. I've never used it long enough to determine if the surround is still working. You obviously lose the 5.1 discrete channels though.

Also note that optical SP/DIF type connections cannot carry the newer audio formats like DTS-HD MA or Dolby True HD. It's possible the TV couldn't handle them either.

It's not a fault of HDMI 1.3. It's not really a fault of anything. It's simply that the HDMI audio doesn't get stripped straight off and sent to the optical out. There may even been HDMI HDCP issues with doing that and obtaining the raw audio stream unencrypted.

So yes, you are expecting too much unfortunately.