I have separate UHD blu ray player for films so it's just gaming audio I'm after.
Currently I have this set as 5.1 dolby bitstream
If configuring the PS5 to output audio for games and if you are using an AV receiver to handle this audio then I'd suggest you set the console's main audio output to 7.1 LPCM. There's not actually a true bitstream option for games and there's no benefit associayed with using the Dolby or the DTS bitstreaming options listed in this setting.
If passing the audio through a TV and then out to an AVR then you'd ideally need eARC to be able to convey multichannel PCM to said AV receiver. Even if your setup is just a 5.1.2 setup, the AV receiver will automatically mix down the back surround channels associated with the 7.1 LPCM signal into the surround channels your AV receiver is setup to portray.
Note that the main audio output configuration onboard the PS5 doesn't effect the seperate option you can set for Blu-ray or UHD film discs. The settings you have for games can be totally different to those you have for films.
The PS5 has no ability to output either Atmos or DTS:X relative to games and none of the games made for the PS5 or PS4 have such audio.
If you've height or upward firing speakers within your setup then the only way you'd be able to engage them while using the PS5 to play games is by using upmixing onboard the AV receiver. You'd need to use modes such as Dolby Surround or DTS's Neural:X to create pseudo object based 3D audio.
The PS5 can access and bitstream Atmos and DTS:X if sourced via a Blu-ray or UHD film disc, but has no ability to do so via games or the streaming service apps it can host.
