Okay, I have not solved this problem, but I have an answer as to why this does not work.
After much research, I finally spoke to an advisor who told me that this is a new function of Airplay 2. That is, to offer this audio option which does not work. It's not meant to work because you cannot send audio from a phone call to your Apple TV, but the audio is recognized as an Airplay option anyway.
This is annoying as I would rather just switch to speaker immediately, without the two step process. There is no functionality in giving me an option which actually does not function, so I wish Apple could fix this and have it like it was before Airplay 2.
Those who suggested it was Bluetooth are not correct. It's about being on the same wifi network. If I had a HomePod, it would send my phone audio to that, and that option would be there, but Apple thought it would be okay to offer an option which does not actually work, which is odd. It's meant to be there and it's meant not to work.