Whats diff between. Ht bypass vs using a passive connection-unity gain

The words "home theatre" are not in the owner's manual for the Schiit Freya.

You just need to buy a different preamp if you want HT bypass. 

The Schiit Freya does not have HT bypass and it is not mentioned in the Owner’s Manual.

Have you read the owners manual?

The free trial period is 15 days. Please let your friend, emergingsoul, who had an identical problem know that there is plenty of time to return his Schiit.

I agree that the statement below from Schiit is not what I would think of as HT bypass. It does say the volume has to be all the way up, which would mean the volume is all the way up for all inputs. I think of HT bypass as an input that is not affected by the volume control. That is why reading and understanding instructions is important.

"Home Theater Integration, $0. Okay, all you "home theater bypass" guys. All of our preamps offer true home theater bypass. Just plug in your processor's front channels to any input, select Passive mode, and turn the volume all the way up. Presto! 1:1 home theater bypass, with only a relay in the signal path."

You should return it during the free trial period instead of “scrapping” it.

I recommend that  emergingsoul do the same.

I hope you have better luck with your next purchase