My own incomplete experiments confirm the AAC issue is present when streaming from an iOS device, but yes, there is good information elsewhere, e.g.
https://discussions.apple.com/thread/252848734
The behaviour I see when streaming from Apple Music on my Mac (Big Sur, lossless capable) is:
- Airplay 1 on my MoodeAudio device: constant ALAC 44.1/16 (260-280KB/s) sound stream, no buffering;
- Airplay 2 on my DENON receiver: same average bandwidth, but with buffering.
My guesses as to why this may be present on iOS devices:
- Maybe there is adaptive encoding that downgrades to AAC in case of network issues (I use good quality wireless, have not tried wired connection);
- Maybe it is to do with Apple Music DRM considerations.