In this paper, we highlight that it is inadequate to describe the rotation of the state of polarization (RSOP) in a fiber channel with the 2-parameter description model, which was mostly used in the literature. This inadequate model may result in problems in polarization demultiplexing (PolDemux) because the RSOP in a fiber channel is actually a 3-parameter issue that will influence the state of polarization (SOP) of the optical signal propagating in the fiber and is different from the 2-parameter SOP itself. Considering three examples of the 2-parameter RSOP models typically used in the literature, we provide an in-depth analysis of the reasons why the 2-parameter RSOP model cannot represent the RSOP in the fiber channel and the problems that arise for PolDemux in the coherent optical receiver. We present a 3-parameter solution for the RSOP in the fiber channel. Based on this solution, we propose a DSP tracking and equalization scheme for the fast time-varying RSOP using the extended Kalman filter (EKF). The proposed scheme is proved to be universal and can solve all the PolDemux problems based on the 2- or 3-parameter RSOP model and exhibits good performance in the time-varying RSOP scenarios.