Hardware 3DS Sound Options - virtual surround, how does it work?

[BiggieCheese]

This is something I’ve thought about for a long time, but what’s with the surround output setting located in the System Settings app? Obviously, it doesn’t provide true surround sound as the 3DS doesn’t have any outputs capable pushing out that level of bandwidth, so it likely uses an HTRF/3D audio solution. But I guess what I was wondering was: given that it seems to be forced on a system-based level (DS(i) and GBA modes excluded) do any games actually have proper support for it (like they have proper channels dictated internally for what would be rear/front surrounds that HTRF handles and maps for 2.0 speaker output)
Why does it seem to lower the overall sound quality when enabled, does it lower the actual output frequency or is Nintendo’s HTRF algorithm just somewhat destructive? Would it, in theory, be possible for someone to create a custom HTRF profile (assuming such a thing even exists within the 3DS and is accessible) and modify the system firmware, allowing for that to be used instead of Nintendo’s standard version?
Oh and another thing, I remember reading people suggest it’s explicitly designed with the 3DS’s system speakers in mind and not a pair of headphones a long time ago, I don’t think there’s that much public documentation on it from Nintendo’s end, so does anybody know if there’s any truth to that?