Two Factor Authentication does NOT work with Apple TV

Since updating to Sierra, my Apple TV Gen 2 refuses to log in. Having reset, restored (wireless and hardline to iTunes) and tried a variety of methods I was at a loss. Then I turned OFF Two Factor Authentication and log in on the Apple TV worked. I add this question and answer for those having similar issues.

It is not my preference but it's clear that the Sierra update is FORCING Two Factor and it DOES NOT work with Apple TV Gen 2, at least not yet. Having tested this multiple times, I get the same result. I switch off Two Factor, fix the log in issue on the ATV. Then switch it back on. On attempting to rent a movie I am logged out and when I try to log in I am blocked. Two Factor Security pop ups appear on my phone and my mac, but NOT on the ATV and I see no pop up for me to enter the verification code on the ATV. The ATV therefore is not allowing the log in. On removal of Two Factor again at https://appleid.apple.com/account/manage I was able to log in and rent perfectly. I will keep an eye on this as I am sure it is a bug. As I said, I would prefer to have Two Factor all around but for now I will have to wait.