I’ve checked the manual and the operation of my NR1603, and the HDMI Control setting enables both power-on triggers from other devices as well as passthrough. You can see from this shot that the 1603 has a more basic menu than your’s. I have never before checked passthrough in standby as TV sound is always routed through my main front speakers and I need the AVR to be running its pre-amp output into the external front amp with volume control via the TV. However, I did just check, and passthrough works.
You might be interested to know that when I switched HDMI Control off, as well as losing the ability for the TV to turn on the AVR, I also killed CEC to the Vero. I had to re-boot the Vero to get it back.
In the meantime, the OSMC Pi running to my kitchen system is behaving itself as well as the LE Pi did, whereas the Vero was just a non-starter in terms of CEC reliability, although in my other systems Vero/Panasonic combos are fine.