My simple question is, "Why?"
Only Apple knows for sure. However, I suspect the reason is simple—the TV4 simply does not include a "fully functional" Dolby Surround Decoder and, even if it did, does not include the pre-amp circuitry needed to properly apply the Dolby Surround settings/values included in the original DD/DD+ bitstream to the decoded audio to restore "proper" playback levels/emphasis before sending the various audio channels to the actual output interface.
As previously indicated, Apple chooses to decode DD/DD+ bitstreams in order to mix TV4 "system" audio with other audio sources to "enhance the listener's audio experience." While this approach works well enough with most non-Dolby encoded audio sources which don't contain embedded playback settings, the incomplete processing of Dolby Surround content before said mixing, IMHO degrades the user audio experience more than it enhances it. Further, I don't use iTunes Store media, so as long as the TV4 is incapable of globally searching, locating, and playing media from my own iTunes managed library database, Siri is less than useful as far as I am concerned. In addition, since I can live without Sound Effects and Music (TV4 option setting seems to have no effect on my use of the device), I'm quite willing to forego such "enhancements" if Apple would restore a separate "HDMI Dolby Passthrough" output option functionally equivalent to previous IOS and pre-tvOS v9.1 TV devices.
In short, like many others, I am now forced to choose whether to use the older TV3 that provides better processing of all of my Dolby encoded formats or use the TV4 which normally provides better video processing, as well as, the use of third-party apps and games.
I figure that I'll be ditching the ATV and purchasing a Blu-Ray/DVD player and purchasing my Movies that way. As Apple's TV shows don't feature anything that's unique to them, my TV Show content I can source else where.
That, of course, is a matter of personal choice. Frankly, I prefer to purchase my media on optical disc and then transcode and store it on a computer at reduced resolutions for easy access on a daily basis but still be able to play the content in its original 2D/3D format at full resolution if/when desired. (Have yet to test TV4 3D "side-by-side" iTunes managed playback capabilities.) In any case, I've currently collected thousands of video files covering 9 decades of cinema and television history which I am reluctant to play using the TV4's currently sub-standard Dolby decoding processor logic. (I.e., optimum playback requires constant manual manipulation of playback settings to restore quality normally controlled automatically by the Dolby Decoder.) As to the use of a dedicated "smart" Blu-ray player, I also have to agree that it would likely provide better audio support than the TV4. For instance, at the urging of bodosom to check alternative Dolby Dial Norm settings, I tested my Oppo BD player using its built-in Netflix app and discovered audio (e.g., Marvel's Jessica Jones series) was passed through to my AVR for decoding as E-AC3 as compared to the TV4 PCM/DD5.1 output logic.
The ATV4 refuses to play (consistently) My Music I have purchased from the iTunes store, so I've already given up trying to use that functionality.
Not familiar with current issues in this area. Previous tvOS users have mentioned problems with intermittent activation of Dolby decoders when playing music but these users indicated this problem was fixed by the v9.1 update that unconditionally outputs stereo music via the "Stereo" mode—the same solution that prevents my AC3 active matrix (DD ProLogic II) audio tracks from being automatically post-processed (after TV4 channel decoding) by my receiver. (I.e., TV4 decoding of the AC3 audio without decoding DDPLII matrix audio to discrete channels for PCM or DD5.1 multichannel output means I am forced to manually activate my AVR passive matrix decoding—or leave it activated on a full time basis—which is less stable and provides less channel separation, emphasis, and directionality due to the absence of metadata playback settings "lost" during TV4 processing.
Apple hasn't lost sight of its objectives - it's just that they differ vastly from mine.
I tend to agree that Apple seems to be in too much of a rush to provide functionality and features that do not work as well as they might or are provided at the expense of other, already working features, that are of more importance to many users.
