Does the Apple TV need to stay on after it is set up?
Does the Apple 4k TV need to stay on after it is set up?
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The sleep functionality sets it to a low-power state (standby), where it will listen to remote power-on and network power-on.
Sleep or wake Apple TV - Apple Support
To have it truly turn off, you can disconnect from power. Not needed, and a bit inconvenient. Your setup will be retained.