Sound sources can be anonymized, though. If the source of a given sound is on the other side of a wall, the player can't see who it is, and the client doesn't need to know.

I'd go so far as to not even notify the client about sounds that are too quiet and far away for the player to be able to hear in the first place. Calculating echoes on the server and having the client treat them as separate "original" sound sources should also help somewhat.