It appears, as is typically the case, that the XLR/RCA switch on the Audio Horizons 3-series DACs selects between the XLR and RCA digital INPUT connectors, and has nothing to do with which analog output connector is being used. The XLR and RCA analog output connectors are presumably driven simultaneously, as Brf indicated.
So the reason that you hear nothing when "XLR" is selected is that nothing is connected to the XLR digital input connector. The MBL preamp has nothing to do with the issue.
The bottom line: Hey, no problem!
Regards,
-- Al