Thinking about it some more this sounds very reasonable. At least we don't have any indication (yet) that any digital signal could escape the Ultra's processing at higher than 24 bit resolution.When using the internal DAC you can have the DAC itself perform the volume adjustment by first ramping to 32b and then applying the correction, or maybe they feed the internal DAC with a 32b stream.
But with an external DAC, unless you send 32b out you don't have that option and thus do lose dynamic range.
Luckily, everybody agrees that USB out always sounds a lot better than S/PDIF out, so no matter what WiiM's answer might be we already have a winner.