First I must have missed it, so thank you, but its more of a service manual though and does not give me how to operate it. But since I am not electronic savvy I am not sure if the outputs it mentions is for Phono in to stereo or line out. 730MV rated I assume it refers to Phono and not to Aux.
Incorrect. 730mV refers to Aux/Line Level. There is no phono input on this unit, no phono preamp.
The QSD-2 would be used in a tape loop of a quad receiver. Its outputs would go to LF, RF, LR, RR. It is a line level unit, not phono level at all.
Matrix decoders work at line level, at least the ones I've read about here. (CD-4 demodulators, however, accept only MM cartridge level).
If a phono (no preamp, just moving-magnet cartridge to RCAs to input of decoder) is plugged straight into a decoder, the audio level would be very low, EQ would be wrong (tinny), decoding would be poor-to-none, and I would expect background noise (hum and hiss).
MM cartridges put out around 5mV.
Line level minimum is about 740mv nominal (around 1volt typical). QSD-2 accepts as low as 130mV and as high as 3volts, as seen in 1. Specifications of the service manual.
So, you see, sending a signal approx. 20 (edit: no, 200?) times too low would be outside of operating parameters of the unit and it would not function as intended.
To use QSD-2 with two stereos, it gets confusing, but assuming they both have tape loops, then phono would go to phono IN on one unit, Tape OUT from that stereo would go to input of QSD-2, Front OUTS from decoder go to Tape IN of one stereo, and Rear OUTS from decoder go to Tape IN of second stereo.
This is all assuming you have a traditional old-school turntable with
NO internal preamp.