I think here is where it get real tricky and confusing at the same time. If you look at the DVD specs that is correct the bit rate for the specs can't support the lossless higher bit rate, however... is this for the DVD specs for reproduction or is it limited too by the media? Remember we are dealing with bits of digital data, so for the media itself is just data.
When we tell the player that this is a BD disc it uses the laser pickup circuitry/electronics for the "Blue laser" which supports a higher bit rate, provided here that the player recognizes this a bluray media. There are some markers on the media itself and how it gets recorded that some players check and some others don't. This is the only explanation of why some players play the discs with no problem and some others don't.