Best Digital Interface

I believe what your original inside outside statement means is that the RME will accept an external clock signal over the SPDIF interface (usually a BNC connector but does not have to be). If using the USB connection, then the RME defaults to its internal clock, which it does with any of its inputs "unless" there is a clock signal present at an SPDIF interface, which is probably set by a menu choice or internal DIP switch?

I believe what your original inside outside statement means is that the RME will accept an external clock signal over the SPDIF interface

The S/PDIF interface requires the data to be clocked from the source.  This is the only way it will work and it is part of the interface specification (the digital pulses representing data will need to be transmitted using the timing of the original music data, such as 44.1Khz or 96Khz, etc.)  However, there are some DACs that will re-clock those digital pulses in effort to reduce jitter and increase accuracy.  Sometimes this provides an improvement, but not always.

You may be getting confused with DAC/transport systems that use a "master clock" for S/PDIF.  In this scenario, there is a separate device that generated exactly timed "clock pulses" to BOTH the transport and dac.  The transport and DAC do their audio encoding/decoding based on the timing of the pulses from the master clock device.  This is usually a closed proprietary system which requires the transport, dac and master-clock devices to all work together.  This is an option usually on $$$$ level equipment.

@auxinput

The S/PDIF interface requires the data to be clocked from the source. This is the only way it will work and it is part of the interface specification

Why would a DAC in this day and age rely on a source's data stream which could be flawed rather than use an internal clock? 
It makes sense to not include an internal clock if a master clock is being used, as in studio setups.

These specs indicate that jitter is being suppressed internally, so there is some device reducing any jitter.

  Clocks: Internal, SPDIF In
  Jitter suppression of external clocks: > 50 dB (2.4 kHz)
  Effective clock jitter influence on DA conversion: near zero

The guy (Lucas Audio Lab) who made my Roon server from scratch insisted I stick to USB and forego i2s and any alternatives for the best digital output.  I’m not technical enough to really understand it, but it sounds phenomenal into my usb tube dac (wells audio cipher).

 Clocks: Internal, SPDIF In
  Jitter suppression of external clocks: > 50 dB (2.4 kHz)
  Effective clock jitter influence on DA conversion: near zero

@lowrider57

That means the internal clock in RME dac is recloking the signal from the source in an attempt to reduce jitter.