Truthfully, 5.1 from the stereo output is kind of just a neat gimmick.
The only way this feature could possibly do something is if you actually started with a "matrixed" signal to begin with, meaning that a 5.1 signal was encoded down to two tracks; Left Total & Right Total (LTRT).
If you simply took the stereo output of your phone and plugged it into a Dolby-equipped 5.1 home theater setup, theoretically you should already hear something in every channel, even if the song you're listening to is stereo to begin with.
The way Dolby works is, if a sound is unique in the left channel, it will be panned to front left.
If a sound is unique in the right channel, it will be panned to front right.
If a sound is identical in the left and right channels, it will be panned to center.
If a sound is identical in the left and right channels but out of polarity from one-another, it will be panned to both surround speakers simultaneously.
Any and all frequencies from either channel below 120Hz will be panned to the subwoofer.
So, as you can gather, a Dolby home theater does everything on it's own.
Your phone cannot aid in this process. All the button does is phase-shift certain frequencies so that when listening to it in a stereo environment, it will "seem" like it's in 5.1, but it's really not.
The reason you perceived an increase of treble/bass would be because shifting phase actually causes additions and cancellations in frequency response. Plus the distance of the speakers from your head in any given environment will also greatly impact exactly which other frequencies are also affected.
p.s. - I'm an audio engineer.
