Similar issue... and I currently have a case open with Apple... it has been escalated up to their engineers and I'm now waiting to hear back.
My Apple TV 4K also cannot see the entirety of my iTunes library. Everything is set up as it should be (home sharing etc.), as confirmed on more than one occasion with an Apple tech rep. I do not use Apple music... all I am trying to access is my personal iTunes library on my Mac (all music I have ripped myself from CD or vinyl, meticulously tagged).
Some of the issues include: selecting an artist and getting a message that says "there is no music by this artist in the iTunes library" (when, in fact, there is); selecting an artist and seeing only a portion of the albums by that artist in the library; selecting a genre and seeing only about a third of the albums in that genre.
The workaround for the time being is to play music via Airplay (either directly from the desktop Mac or by using the Remote app on my iPhone, which correctly displays the entire library).
Interestingly, I hooked up my older 2nd generation Apple TV and it has no problem accessing, displaying, and playing the entire contents on my library. (Apple has told me that is to be expected, as the 2nd generation and 4K Apple TVs access the iTunes library in different ways).
I will post an update when I hear back from Apple...