it will work on windows 10 20h2?

yeah! Its perfectly working on windows 10 and install the driver

is this virtual or true 7.1 output?

only 2 channels on optical but not labled as virtual 7.1 so probably not

Can it work like this.....3.5mm audio input to usb audio output?

nope, only usb in to 3.5mm / optical out

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StarTech.Com Usb Stereo Audio Adapter External Sound Card With Spdif Digital Audio Out Icusbaudio2D

StarTech.Com Usb Stereo Audio Adapter External Sound Card With Spdif Digital Audio Out Icusbaudio2D

Product ID: 253327795

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Details

Compatible devices
Personal
Brand
StarTech
Hardware interface
USB
Audio output mode
2.1
Platform
Mac OS X

🎧SPDIF digital audio output

💻Plug & play USB connectivity

🔊High-fidelity stereo sound

Description

🔊 Upgrade your sound game—because your ears deserve the best!

UNIVERSAL COMPATIBILITY - Works seamlessly with PCs, laptops, and more for versatile audio upgrades.
COMPACT PORTABLE DESIGN - Take premium sound anywhere with a sleek, travel-friendly adapter.
EFFORTLESS USB PLUG PLAY - No drivers needed—just connect and immerse yourself instantly.
FUTURE PROOF YOUR AUDIO SETUP - SPDIF output ensures compatibility with high-end digital sound systems.
CRYSTAL CLEAR AUDIO EXPERIENCE - Elevate your sound with pristine stereo output and SPDIF digital clarity.

The StarTech.com USB Stereo Audio Adapter (ICUSBAUDIO2D) is a compact external sound card featuring high-fidelity stereo output and SPDIF digital audio out. Designed for plug-and-play USB connectivity, it enhances audio quality on any compatible PC or laptop, making it an essential upgrade for professionals seeking crisp, clear sound in a portable form factor.