This is confusing to me too:
DSD comes with its own limitations. DSD is a 1 bit stream of data that can not be processed digitally. There is no Bass, Treble, Loudness, EQ etc. possible at all. The volume control is no longer done by the DSP, but the DAC chip, which converts DSD into PCM to be able to offer level (volume) modification. You won’t notice that, volume operation at the ADI-2 Pro is seamless and behaves identical in any mode. The DSP now performs an additional DSD to PCM conversion, to be able to show the audio signal on the level meters and the Analyzer – a unique feature of the ADI-2 Pro.
Even more extreme is DSD Direct. If activated (SETUP, Options, Device Mode), the DSD signal is not converted to PCM within the DAC, therefore there is no volume control at all – except for the analog reference levels, which can be used to set the coarse output level/volume. Left with no volume control, the ADI-2 Pro intentionally deactivates the headphone output 1/2 in DSD Direct mode – the analog signal is only available at the rear outputs. Phones Out 3/4 continues to work as it is independent and uses normal DSD mode or PCM, according to what source signal it receives.