I'm wondering the same thing -- I wish the AppleTV 4K (2021) would let my pricey receiver do the decoding instead of decoding the audio itself and then sending the Atmos overlay data separately. Regarding the number of channels, I suspect that it just passes PCM for whatever number of channels the source is encoded at (5.1 or maybe 7.1 but I don't know if any streamers can do that), and then the Denon somehow figures it out or mixes the channels together if necessary.
Just pass through the audio. What's the benefit in the ATV doing it -- other than to work with TVs that can't do the decoding themselves?
There are several threads here reporting this problem, especially in "Drive to Survive" which gets it every single time, as does HBO Max movies. I now have a new Sony TV with GoogleTV built in and I started using that to watch Netflix instead of the AppleTV -- Atmos is completely glitch-free over eARC. Fortunately, it supports the AppleTV app, so I can use it to watch Atmos content everywhere. But I miss the AppleTV "Up Next" feature -- the app does have it, but only for content subscribed through with AppleTV, like AppleTV plus, purchased iTunes movies, and channels (I get Paramount+ and Showtime through AppleTV+ because of a promotion).
Still waiting for someone to integrate everything, including Netflix.