640 is a valid data rate for Bluray but is too high for the DVD spec. Encore is probable re-encoding it in to a lower data rate stereo.
If you are using Premiere look at the mpeg2 dvd export, it will give you the highest data rate for dvd, I think it is 448 (or something similar)
640kbps is indeed too high for DVD-Video specifications, although some players will actually output this correctly. That said it is a bad idea to deliberately include a stream that will not play properly - if at all - on all systems.
Maximum data rate for AC3 on DVD-Video is indeed 448kbps, and it may interest you to know that this data rate has all the top end going unidirectional above 14.4kHz - this means you lose a lot of the pan information.
I would also avoid using AC3 on Blu-ray. Encore will accept DTS, and may even accept DTS-HD MA (I will test this) in passthrough mode (meaning you will not be able to preview the output) and to my way of thinking, AC3 is the lowest grade you can use for 5.1 on Blu-ray and I believe it should never be used. That is a personal opinion though.