This is the only audio type setting I could find 2016 M235xi with HK.
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Also, I found this
article that states "Despite being branded as Harman Kardon, the S674A setup's specifications are very similar to the regular Hi-Fi option, but contain more speakers. Harman Kardon stereos in 1 or 2 Series BMWs, as well as some other models, are likely to be the lower-end S674A option, not the higher-end BMW Harman Kardon surround sound system found in more premium vehicles."
Before upgrading to the BimmerTech Amp anmd Speakers, the HU was set to hifi_system_harmonkardon and sounded like complete garbage. Once I changed it to hifi, removed the center channel, did the stage sound proper.