So, one guy came from MI, and made video of the entire problem. Following issue have been highlighted and submitted:
1)
HDMI ARC Play/pause and no sound for DD+. While playing 4k Dolby Digital plus content on native apps (Netflix, Prime) the sound doesn't come. Have to toggle the input to get the sound. Moment you pause the content, sound drops and AVR shows decoder off. However, same app and content while being played on Firestick doesn't show any problem.
2)
No or muffled sound through SPDIF. With digital passthrough selected, and while playing 4k Dolby Digital plus content on native apps (Netflix, Prime) there is extremely muffled sound that one can barely hear. Moment this is toggled to Dolby Digital on TV, the sounds come, however in certain case there is no surround sound at all.
Let's see what is MI response to this situation. So, far I am not very impressed with their response and customer service. Also, not sure how they plan to fix this problem? HW replacement or some kind of software update?
Moreover, after speaking to a few friends, and reading multiple posts what I have understood so far is that this issue is primarily with ARC devices. In most of the cases eARC devices work fine. And this issue is present in other MI TV models as well.