No, you guys have it backwards.
This setup would typically be done using a 522 and 322. Each has TWO tuners, and two sets of RF outputs. x22-TV1-RF is VHF and not stereo. x22-TV2-RF is UHF and is MTS stereo.
Usually, the 522-TV1 would go directly to the "good" TV in the "main" location. It's TV2 (UHF w/ stereo) gets sent to the house wiring.
Then both outputs of the 322 go to the house wiring. TV1 is VHF non-stereo, and TV2 is UHF-stereo.
The biggest problem arises when trying to send both TV1 RF outputs to the house wiring. The RF modulators aren't that great and most will have adjacent channel (3 & 4) interference problems.
Of course, if you need to do it anyway, or have to have stereo, use an external modulator.