So you want to convert HDMI to component video to get a surround sound signal? That makes no sense but it is what HDFury does.
Let me answer your question - HDMI only allows one audio and one video signal (stream) to be sent out at any time. So sending out high resolution multichannel audio at the same time you send out stereo audio can't be done (that's two streams). With HDMI you can either send multichannel or you send stereo but not both at the same time. Also, the HDMI spec requires that all sinks (the destination devices) receive a signal that is compatible with the destination device.
So, if you have a TV and an A/V receiver hooked up, the only compatible audio signal for both of them is stereo. Also remember that the audio and video are sent out as a data stream not as separate signals. There is no "fix" for this since the HDMI signal is working as designed.
Now having said that you can "bypass" this limitation by looking for devices that fool or spoof the EDID (which is what contains the configuration information). There are a number of matrix switchers that will do this spoofing. The key thing here is that if you tell the system that everything is multichannel, then the TV will not be able to process the audio signal. So, you will still only have one device that generates audio with this type of matrix switcher.
Normally an AVR will do this for you. Does your AVR not have HDMI inputs?
Finally, whether a sink is on or off is likely irrelevant. Most devices when "off" are actually in standby and so the EDID is still sent. It is only if you pull the AC plug that the EDID would not be sent.