I also checked the settings in audio and tried to change format and it says 5.1 or stereo only. I thought Apple TV supported spatial audio or Dolby atmos with my AirPods Pro.
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What’s your Netflix payment plan? Only Premium is Dolby Atmos.
Yeah mine is premium
For the sound settings auto is the default it will usually pick the highest quality supported by your audio system. Change format is to lower the quality to Dolby Digital 5.1 or stereo.
If you set the audio to 5.1 Netflix will not send an Atmos stream, if you set it to stereo and you have a premium sub you get Netflix Spatial Audio on some titles which is not the same as Atmos. If you have a premium sub leaving the sound on auto and getting the atmos stream is most likely better than the 2 channel AMBEO spatial stream.
https://en-us.sennheiser.com/newsroom/netflix-spatial-audio-powered-by-sennheiser-4bdyzc