I run MC200 to F80 via coax (then M audio coax/optical converter) if that counts. This runs simultaneously with speakerlink to my DSP5000's.

No issues.

Imho, dealer is talking BS. Sounds like MC200 possibly picked up a fault in transit or it was faulty when he sold it.

There is absolutely no reason why it should not work in mode that you are trying to use it.

Meridian owner since 1992
Prime & PSU, Focal Elear headphones, Roon (ROCK 8Gi5 NUC), Explorer 1 & 2, F80. 200/203, various Sonos (via Roon).