The Playbar decodes Dolby Digital, it does not do DTS. Usually not a problem except for Blu-ray. If you have a Blu-ray in the system get one that can convert DTS to Dolby as some discs do not have a Dolby track on it.

Fins is correct that many older TVs did not decode Dolby (or DTS) and therefore only requested PCM from the source. So they only receive PCM through their HDMi inputs. If the TV only accepts PCM through its HDMI inputs that is all it can repeat to the optical connection. For OTA and its apps it could do Dolby. Before it was only Sony and one or two other brands that could handle Dolby. Today, almost all TVs have Dolby decoders and repeat the Dolby signal to the optical connection. This is not an issue anymore for the Sonos Playbar.