Will below setup below work ?
GPU DP to PC monitor ( not TV )
GPU HDMI to Creative Katana HDMI ARC
( Yes I know there's a USB port but I want to know if the above could work or not )
Oh. You are using a PC monitor.
The manual says it all. If you do not use any Smart TV apps like Netflix on the monitor itself, then just use the USB-C to USB A cable provided to connect your PC directly to the soundbar. No need for HDMI ARC as it is finicky at times.
The USB method allows for direct 5.1 discreet PCM audio straight to your soundbar along with passing through some Dolby encoded audio formats.
But yes, the above method will work. DP (GPU) to DP (monitor) for video.
And then switching the audio to default to the HDMI audio for your HDMI (GPU) to HDMI (Kanata V2 soundbar) connection.
But the problem with HDMI is that, it needs to be active. In other words, you will have to use Extended screen or Duplicate. The HDMI video source needs to be active in order for you to get audio out. Would you prefer to have an Extended screen that you can't even see and might cause some of your apps to open on that invisible screen that you can't see? Only use this method for AVRs. Not for soundbars with a PC monitor of all things. It just makes no sense.
It only makes sense when you have a setup like mine where the AVR is limited to HDMI 2.0 bandwidth and you have a HDMI 2.1 TV to get 4K 120Hz and you have HDMI eARC issues with some audio such as not being able to passthrough DTS audio to the AVR from the TV's HDMI eARC port. Then you can use a second dedicated HDMI port on the GPU to send an Extended screen to the AVR in order to get the AVR as an audio Source output on Windows.
Other than that scenario, stick to USB. It is also what I use to get 7.1 discreet audio to my Creative Soundblaster GC7 which is then connected to my headphone with its 7.1 virtualized surround for gaming and maybe some videos that use 5.1 or more.