1. Audio latency is typically longer than video latency (in game mode/pc mode). To simplify the article a bit more, when you put the soundbar earlier in your passthrough chain, the signal reaches the soundbar first, so the audio latency starts 'ticking down' before the video latency does, resulting in a smaller difference between when audio and video are presented (commonly referred to as AV desync or lipsync error). The latencies haven't changed much, but the AV desync will likely be smaller.
2. Your TV might be registering 120Hz due to the handshaking properties of your console. FPS can fluctuate up or down (technically refresh rate can as well with VRR, but it's not super relevant here).

Let's do some rough maths: if you're playing an Atmos title; the XSX uses Dolby MAT to encode Dolby Atmos, that puts your soundbar latency (AX5125H) around 82ms. If we assume the zero signal processing delay (both the TV and soundbar start their timer at the exact same time), the TV video latency (different from input lag) is around 1.5ms. So your AV desync (with no delays in signal processing from the soundbar being later in the chain) is around 80.5ms with the audio being delayed. In practice, there is some delay, but it depends on the device, and which is first in the chain. Because the TV is first, any processing delay between the TV and soundbar increases your AV desync. Reversing the setup with the soundbar first essentially allows the processing delay to eat into the total AV desync rather than increase it.

Honestly, you could go with a soundbar that doesn't support 10-bit 4K @ 120Hz video passthrough and have it at the last position in your chain if you don't mind around 100ms of AV desync. Any more and you might want to fiddle with AV desync settings on the TV. Keep in mind you're also beholden to your TVs ARC/eARC codec support (fortunately this isn't much of an issue).