The DTS-HD track in the mkv file is not lossless, because there is no uncompressed source for the '97 mix outside the Lucasfilm vaults.
It comes from the theatrical DTS CD-ROM's, which are lossy. Since the cinema DTS format encodes audio at 44.1 kHz and runs at 24 frames per second, it had to be converted to 48 kHz at 23.976 frames per second to fit with home video standards. So that's two stages of destructive processing being performed on a source that is already lossy to begin with—the final result is only encoded into DTS-HD MA format to keep it from having to undergo any additional degradation.
Transcoding this into AC3 would be another destructive stage which is best avoided altogether. Any improvement over the laserdisc version would be marginal. Far more noticeable is the discrepancy in playback level caused by the laserdisc audio having a DialNorm value of -27, meaning that it is 4 dB quieter than the other versions. Turning up your receiver's volume by 4 dB to compensate when listening to the AC3 track will cancel this out, and it will sound very similar to the DTS. In fact, it may actually sound better due to the laserdisc audio having a discrete LFE channel, unlike cinema DTS which stores its LFE information in the surround channels and low-pass filters it out to the subwoofer.
The mkv file has the DTS, AC3, and stereo PCM tracks, and of the three, the stereo PCM clearly has the best sound quality due to being true uncompressed audio. The other two each have their own advantages and disadvantages. For best quality, you have to give up the discrete channels and extra bass offered by the 5.1 tracks, since no lossless multichannel version of the '97 mix was ever released by Lucasfilm. As Harmy indicated, AVCHD does not support DTS audio, only AC3 and PCM, and the PCM track is too large to fit into a file size intended to be burned to DVD. That left the AC3 as the only viable option; but as I have explained, the difference is less significant than may be supposed at first glance.