How the Node Icon processes digital audio

I have a question on digital playback via the Node Icon. If digital passthrough is disabled and the volume level is fixed, what happens to the digital output via co-ax? Are all 44.1 KHz tracks upsampled to 88.2 KHz or is this done only for MQA encoded tracks? I have connected the digital output to an external DAC (the Benchmark DAC3) and it shows some tracks as being 44.1 KHz and others as 88.2 Khz.