Daniel, it is not 1080p120fps Video it is 1080p at 120hz frequency. The OP has got a TV monitor refresh rate (120hz) confused with video resolution 1080p. He does not mention what the frame rate is. Or. He means 120fps and not 120hz? The video is coming from the HDMI output on a graphics video card, normally used in gaming and VR systems. Not sure this would even work, as it is designed to connect to a 120hz Monitor. This is the point of confusion here.
As for converting ADAT audio to HDMI or SDI imbedded, that is going to be tricky. He wants to take video (probably gaming or VR) from a Video graphic card output (HDMI and merge a 2:1 surround-a-sound audio feed) from a RMA Baby Face USB MIDI digital audio interface connected to his source computer. The RMA unit outputs the audio via a toslink optical ADAT type connector (fiber optics). Toslink was originally designed to move 8-channels of unbalanced audio data over an optical digital interface, which was common on many digital audio systems, used in home theater setups, home recording studios, and early digital recording systems before AES/EBU using XLR connectors (balanced audio) and full scale fiber optic systems became the preferred digital audio signal interface in most professional audio production systems, and now LAN based systems. Toslink ADAT is mostly used today for interfacing digital mixers with computer based recording/editing systems.
Seems to me, Eric is trying to mix apples and oranges to get a banana!
He would better off getting a proper video/audio interface card that would give him a HDMI output with his 8 channels of audio already embedded. Perhaps he is developing on-line gaming programs, or playing on them, and wants to record the games in real-time.
Good Luck Eric.
Cheers