That's odd. It works for my system.
If I select All Movies I see the shows that I have not downloaded and my items on my hard drive.
If I select "Only Movies Available Offline" then only the items that I have on my hard drives are listed on my iTunes
I tend to download my movies and shows as 720p and store them on my Mac because I still have the AppleTV (generation 1) in the Kitchen. The ATV1 will not play 1080p and I either have to store the show on the ATV1 hard drive or as I normally do I just stream show from my Mac to the the ATV1.
When I use the ATV3 in the family room I tend to stream the purchased items in 1080p from Apple, otherwise I use home share for the items I have ripped.
* MacPro (early 2009) firmware upgrade to (mid 2010) 2x 2.93, (12 core) 32GB, 4 x 4TB HD.
10.10.4
iTunes 12.2.1.16