If you feed a DAC with USB does XLR matter as much?

AES/EBU, USB, HDMI are simply different ways of how to connects audio gear and have benefits under certain circumstances.

AES/EBU is the professional standard used in studios with 110ohms impedance . The input of the DAC is transformer coupled.

USB is converted to I2S which is used inside the DAC for connections. This is done by a chip.

If you can use I2S via HDMI it might sound better than USB (or not).

In studios all digital gear is  normally connected to a master clock so the XLR connection is fine and has some advantages. For home use I would prefer USB or HDMI but it really depends on the specs of the gear. Listening will help to find what sounds best.

Does running XLR matter as much if you use a USB input from a streamer instead of an AES/EBU from a good transport?  

These things are independent and the choice for DAC input has no impact on the choice for DAC output.

Converting to i2s in a Matrix 2 first might improve it. No way of knowing without trying. Then you need a quality hdmi/i2s cable to realize any improvement.

These things are independent and the choice for DAC input has no impact on the choice for DAC output

True, but would converting to I2S be beneficial?  Is the added conversion worth the effort/cost?  Does the input of the Pegasus benefit from converting to I2S?  Guess I’ll just ask Musician to see what they say, but just thought I could get some good feedback here before doing so.