So I think I have already answered my own question, but I thought I put it out there to see if anyone else has run into this issue.
I am setting up a system for a client of mine where the Xbox One feeds surround audio into his receiver via HDMI.
I also want to send stereo audio through the optical output into his house audio amp so he can play/watch the X1 in his office when the kids are doing something else in the main viewing area.
I have not been successful in getting audio out of both at the same time as of yet. I have been playing with the settings on my Xbox One at home and can only get optical audio out if I turn off HDMI audio.
Is this assumption correct or am I missing something?