I noticed this problem today, after the TVOS 17.4 update, up until which (I think) everything was working fine.
I have two Apple TVs (both 4K), each is connected directly to Atmos capable sound bars which are connected to the TV eARC HDMI ports. I first noticed the problem after the 17.4 update when I started watching a programme on the Apple TV+ app but had no sound. I checked and the same happened with other apps, Netflix, Prime etc.
On checking the audio settings, both ATVs remained set to "Change Format" off and "Dolby Atmos" on. Everything had been working fine on these settings before. Now, the only way I can get sound is to select "Change Format" and select Dolby Digital 5.1.
It seems that the Apple TVs still recognise that the sound bars are Atmos enabled as they are allowing the setting of Dolby Atmos to on. When set like this, on Netflix I can see the Atmos label against relevant programmes but get no sound when playing them, there's no sound coming from any non Atmos programmes / movies either.
I've tried doing restarts, full resets and changing HDMI cables etc etc etc but, given the fact that everything was fine up to two days ago, I've come to the conclusion it's an update induced bug. I read somewhere that Apple changed their Atmos protocol to 8.1 in a recent update whereas many / most devices are 7.1? How right that is I don't know and I get bored quickly of trying to hunt for the causes of problems that, up until an update was installed, didn't exist! Very frustrating.
I've never been THAT impressed with Atmos anyway TBH, point is though, things that Apple claim the ATV supports should work!