In my Anthem AVM 20, when you assign Analog Bypass to an input, all the DSPs are turned off, the video circuitry, and there's no EQ, bass management, or tone controls. The only thing you get is volume control.
That way, an analog source like hi-rez digital or tape/TT isn't getting digitized and/or going through the Anthem's DACs (if you prefer the sound of say, your own CD player).