I think many/all of the above responses are basically correct but here is a better explanation I think.

I have a Roland Sound Canvas. I can set it up so that each midi channel sounds a different instrument. On BiaB, this isn't possible, why? Well, BiaB when it sends midi data on the midi out channel, it sends many different midi channel notes. So, If I used my keyboard to input midi data to BiaB, there would be confusion if I sent say midi channel 2 commands while at the same time BiaB was trying to output notes on Channel 2. So, the solution is to let BiaB listen on its midi input to any midi channel but ignore the channel and basically assume it is in this case Channel 5, where channel 5 is unused. This way thee is no conflict.

Generally, anything that is sent to midi in is reflected exactly and outputted by midi thru. BiaB really doesn't have a true midi thru channel. BiaB midi out consists of what BiaB produces plus midi in, converted to channel 5.

Am I correct, sort of??