Like the DS Mk I, roughly a red light means the currently selected input isn’t connected/has no data. A green light means the connection is good.
For USB a green light indicates that a USB cable is connected to a USB host. A red light indicates that there’s no connection to a USB hose.
For S/PDIF, AES3 and TOSLink the green light means that there’s an active signal on that input with a valid sampling rate and no bad flags from the AES reciever.
For I2S a green light should mean that there’s a PS Audio I2S source connected. I believe that at the moment it indicates a valid signal present.