Sony HAP-Z1ES and Denafrips DAC

I bought the Sony HAP-Z1ES a few years ago. It has the latest firmware dated Feb 2017. A few days ago I received Denafrips Terminator DAC which was ordered a month ago. It was connected to the Sony HAP-Z1ES using USB connection.

With both Sony HAP-Z1ES and Terminator turned on, when Terminator input is switched to USB, Sony HAP-Z1ES shows "An unsupported USB device has been connected". But the Sony analog output is turned off and data is indeed sent to the external DAC, producing sound.

I’ve tried rolling back Sony Z1ES firmware to the previous version and it behaves exactly the same.

Before I ordered Denafrips Terminator DAC, I’ve tested Sony HAP-Z1ES with Oppo UDP-205 as an external USB DAC and it works flawlessly without any errors. So I assume the Sony will work with another DAC.

Also, occasionally when jumping tracks or changing folder, Terminator DAC produces very weird and wrong sound. It does not happen all the time. When it happened, jumping to the next track or restarting the existing track clears the problem.

I would like to hear experience of other Sony HAP-Z1ES users when using external DAC, especially the Denafrips DAC brand, if you see similar problem. Thank you so much.