after updating IOS to 14.7.1 Dolby Atmos turns off when I plug in headphones

What headphones are you using? See the 'Choose how to listen to Dolby Atmos on your iPhone or iPad' section in:

About spatial audio with Dolby Atmos in Apple Music - Apple Support

If you choose Always On, here’s what you need:

If you want to use other headphones that don’t support automatic playback, choose Always On.

I don’t disagree with facts 1 & 2. As to fact 3 what publications state, I offer no opinion one way or the other (i.e. don’t care but appreciate that you do).

Re: first two facts, I have responded to already but summarize again for you: any headphone for listening, not for duplication. How good or bad it sounds depends on the headphone. I’ve already conceded that this fine difference can be misleading. Fact is, a $20 headphone can’t sound and behave the same as a $500 HP, at least not with Apple’s version of Atmos. That’s just plain common sense. So you need to take “any” with a huge fist of salt.

While you’re completely within your rights to protest the misleading “propaganda” suggest you take it up with Apple direct https://www.apple.com/feedback/, not here. I have no control over what gets written and/or how misleading it could be (and am not defending it either).

Your subjectivity issue, let’s take it up as a separate discussion post iOS 15 due in a few days (20th). Until then at the very least and possibly beyond depending on your specific headphone make/model, my advice for you and others in similar predicaments is to switch to Lossless. All the best!

I Have exactly same problem since the update to 14.7.1 when I connect my headphones ATMOS turns off, it used to be fine before the update I have the option always on as well. Does anyone figures it out what’s the problem ?

I am having the exact same issue. My Dolby Atmos is set as “Always on” and works with my Airpod Pros but not with my Amazon Echo Plus speaker. Would be so happy if anybody knows how to fix this or if the new iOS 14.8 update fixes it.

Another thing I’ll add is that I can play in Dolby Atmos on the Amazon Echo Studio speaker when I play it on my laptop but not on my phone. The Dolby Atmos only works on my phone when I use it for my AirPods. Ironically, when my girlfriend plays in Dolby Atmos on her phone on the Echo Studio, it works. Must be an issue with iOS 14.7.1 or something.

I don’t know if anyone else noticed it but actually Dolby Atmos is working even though the logo doesn’t show while playing which is pretty much just a visual indicator, if you turn on and off Dolby Atmos while playing by sure you will notice the difference if it is working.

this is the case in my iPhone 12 iOS 14.8.

Yes listening is certainly possible, but the ultimate generation of Atmos sound depends on the particular headphone in use. Bottom line: not all headphones are Atmos-capable. I agree the description is misleading, but technically what you’re observing is correct behavior.

Fact: every piece of Apple's propaganda says Dolby Atmos will work on ANY headphones.

Fact: lots of people are questioning why it's no longer working when it did before.

Fact: All independent hifi/music publications stated that spatial/atmos will work with ANY headphones.

Subjectively: I heard it on 14.6 it worked, it was good, it was better than 360 audio (which does work on Sonys because, like DA and PS5s tempest, this is only a new compression technology so should work on all headphones). It now sounds rubbish. It's a definite change from 14.6. I spent along time comparing mixes, and evaluating my favourite tracks. It is not what it was prior to the 14.7 update.

I have the issue also…I have restarted my ipad and turned atmos always on off and back on and nothing is bringing it back. Same as everyone else it has been since updating to 14.7.1

Not all headphones are Apple Atmos capable. Pre-14.7.1 was a false indication, now fixed. Reverting to an older release is not possible, unfortunately.