When burning a Blu-ray disc with DVD AS5.0, there is only one choice for the audio: PCM.
Here are a couple of interesting discoveries:
1) outputting the PRE7 HD timeline as PCM audio instead of Dolby Digital (AC-3) does not avoid recompression by DVD AS5.0 to PCM
2) outputting the PRE7 timeiine as AC-3 audio for recompression by DVD AS5.0 to PCM results in vastly improved playback of the Blu-ray disc
As that second discovery is counterintuitive, I repeated the test with multiple Verbatim SD discs to confirm the result, specifically, flawed playback of the audio portion of the creation when ouput from PRE7 with the choice PCM audio.