So if you've a setup inclusive of back surrounds and if the source is 5.1 in nature, the AV receiver will upmix the 5.1 source and utilise your back surrounds regardless of the mode you are using. THis basically prevents 5.1 sources being portrayed by just the speakers ordinarilly associated with a 5.1 setup and forces the audio to be upmixed to 7.1.
Well part of me agrees with Yamaha here (depending upon exactly what they are doing and what assumption they have made) .
My reasoning is that with a 5.1 system, the rear pair tend to be placed roughly between where the sides and rears would be. So actually, there is no speaker in a 7.1 setup that correspond to the rears in a 5.1. Of course there are debates on the ideal location for the rears in a 5.1, but they generally end up between where the 7.1 sides and 7.1 rears would be.
So, in order to correctly reproduce the sound localization of 5.1 on a 7.1 system, ideally you would be up-mixing the rear channels of 5.1 to the sides and rears of a 7.1 with prominence given to the sides. I think if you look at dolby atmos setup and take there mid points of their suggestion location, then perhaps they assume that and upmix appropriately.
I think that when such upmixing is done, I may prefer to have a means to tweak the upmix split.
Of course this assumes they are doing it following above logic or similar - they may not be
This is my reference:
Dolby Atmos Speaker Setup Guides
There is one caveat where I do not have an immediate reaction one way or the other and that is pure direct mode. It bypasses bass management and my feeling is it should also bypass any upmixing etc as well. TBH I dont think I have ever actually used pure direct with an HDMI source at a time whenh I am paying attention to exactly what it does - only ever used it for stereo analog sources.
Straight mode behaving the way I describe I would be OK with, but probably not if it is doing something more. I have a 5.1.2 so I cannot easily check what my Yamaha AVR does.