First, the HT-503 is a FXO/FXS sip ata, this was using the FXO port. The port needs a talk battery source to satisfy its' connection sensing.
The transformer inline is not effected by dc only ac passes through. Therefore when offhook and audio is passed from or to the source connected to the secondary.
I was testing moh on 7.1 via sip and received audio. It could also be used to output to a paging amp.