Absolute nonsense ...it is a pass through and no degradation of the signal.
Maybe you are the One who is confused. When you say its a pass through, are you implying it just passively switches wires because that is not the case. The preamp is accepting the analog signal just like it would from any other source and then setting its volume level at unity gain, so as not to change the output level of the incoming signal.
Does your home theater bypass work when your REF3 is turned off? I dont think so, and I know it does not work with the LS25MK2 turned off (we are talking about the LS25MK2 here arent we). If the 2ch preamp has to be turned on, then it is NOT just passively switching wires, it is actively doing "something", and I am telling you for a fact, that with the LS25MK2 in home theater bypass mode, it does change the sound from your ht processor and not in a positive way. I would assume the REF3 would be on the same level as a VTL7.5, and the change in sound through those units would be (is) extremely minimal, but this is not the case with the LS25MK2. The lowering in sound quality (degrading) was easily noticeable.