My Blu-ray player list various video formats that it can play that includes AC3 as the audio component but under Audio formats AC3 is not listed and in fact when I try to play an AC3 file on a usb stick the file is not seen by the player.

I am confused as to why it can play the audio if part of a video file but not as a stand-alone audio file.

If this is really the case, what other audio formats could I convert the AC3 file to that will preserve the 5.1 surround sound?

This is the relevant section of the manual.