This is quite a cool solution, though I guess it doesn't solve the issue of AirPlay 2 restricting your streams to 256 kbps?
The fact that this is still a thing makes me wonder why Apple Music bothers to have lossless at all when wi-fi streaming is becoming the norm for home listening.
Yes, that's correct - and if wirelessly streaming from my iPhone's Apple Music app to the Wiim was my main or preferred way to do my day-to-day hi-fi listening, it would be a real problem.
In my case, though, I don't subscribe to Apple Music (or any other subscription service), and I long ago abandoned Airplay streaming because I felt there were better, more reliable methods that would allow for a virtually unlimited music-library size (I don't tend to buy the higher-end iPhones with massive storage capacity) and would also allow me to have other options for controlling playback if I didn't feel like using my phone (the Wiim has its own remote, and I also have an old iPad that makes for a nice, larger format Wiim Home app host). Along those lines, in the time since my last comment just above, I was already able to install Plex on the mini, scan my entire music library, sign in to my old Plex account, enable DLNA in Plex, and connect the Ultra to the Plex library using the Wiim Home app. The entire process took maybe 10 minutes. It's just so easy and seamless.
Also, for what it's worth, I've done a fair amount of searching about this Airplay 2 lossy issue and have come across multiple online discussions where people have tested what gets streamed in different scenarios (using Airplay receivers and/or downstream DACs that display exactly what the file format is that's being received and played). They appear to have discovered that if one selects an Airplay 2 receiving device using the system-wide selector, the Apple device will send the Airplay 2 stream in lossless format (albeit limited to CD redbook quality) as long as the wireless network signal is stable and fast. If, by contrast, one selects the Airplay 2 receiving device within an app (because with Airplay 2 you can select different receivers in different apps), then the stream will be lossy AAC. Perhaps an in-app selection defaults to lossy because the operating system needs to reserve some bandwidth in case you select a different Airplay receiver in a different app - multiple streams to multiple receivers.
If you want a Wiim Ultra, and you also want guaranteed lossless Airplay support, then you can get the Ultra and then spend another $100 or so for a Fiio SR11. This is a wireless streamer in its own right, but it is unusual in today's market because it is an Airplay 1 receiver and doesn't support Airplay 2. So you can connect the SR11 to the Ultra via TOSLINK (optical), and that solves the issue - Airplay 1 is less full-featured than Airplay 2, but it is always lossless (again limited to CD redbook) as long as the source files are lossless. The only small annoyance is that in that scenario you have to go into the Wiim Home app and select the optical digital input - then once you've done that, you or anyone else on your network can simply Airplay-stream music to the Fiio and the sound will come out of whatever amp and speakers the Wiim Ultra is connected to. And of course you could simply use the SR11 as your entire streamer - it's got to be one of, if not the only, current-production streamers that uses Airplay 1 and not Airplay 2.
In fact, I would happily get an SR11 to connect to my Ultra, except I have no need for it since I stream my music using the USB and network sources I described in my previous comment. And most of the guests who might end up in my listening room and want to stream something from their phone because I don't have it in my music library - for example, my grown kids, nieces, nephews, their spouses, and a few close friends - have iPhones but use Spotify or another non-Apple streaming service, all of which are natively supported by the Ultra.
So on the rare occasion someone might need to stream using Airplay, this Airplay 2 solution using the software bridge on my mini will do just fine - it might even end up being lossless, and even if it's 256k AAC it will still sound much better than Bluetooth. Not to mention that it's pretty darned difficult to reliably hear the difference between CD quality and 256k AAC.
Finally, with all that said, I do agree with you in principle: Airplay 2 should simply default to lossless, period, and dynamically scale back to lossy only if and when network conditions require it. I don't understand it either, except perhaps Apple's engineers and leadership are more conservative than other companies when it comes to wanting to reduce bandwidth to ensure there are no dropouts or buffering - or maybe Airplay is in some way technically inferior to other companies' streaming protocols and Apple feels they have no choice but to reduce typical bitrates - though I would doubt that since apparently Airplay 2 does default to lossless in some scenarios.