Very simple: you use it the wrong way. Your test file includes 2 channels of Dolby AC-3. Set to Master the AES will play back
- analog (decoded) stereo audio on the Loudspeaker device (channels 1/2) at 48 kHz
- AC-3 (what you call digital distortion) on all other devices at 48 kHz
If you want to play back analog (decoded) signals from other channels than 1/2 you have to use the Windows settings of those channels and disable the AC-3 and DTS property (control panel/sound/select device as standard/properties/advanced or similar, remove the checkboxes)
If the card is slave and you set the wrong sample rate (your file includes 48 kHz digital audio) Windows will automatically sample rate convert the audio - which obviously is only possible if it is decoded at the same time.
BTW, in TotalMix you can always see if AC-3 (constant high level) or normal audio (normal meter movement) is sent out. Better information as hearing at the converter, as you can not be sure if that one mutes an incoming AC-3 stream!