I’m struggling with this too. Mine is LG C8 with Apple tv4k and PS4.
Apple tv works fine.
i tried PS4 using GoT blu Ray which has Atmos soundtrack, if I put in bit stream output setting (Dolby or DTS) I get lip sync issues and app shows 5.1 as the output. No settings achieve Atmos.
Turns out I don’t use the BD feature on the PS4 enough to know there’s an additional audio setting once you are playing the content. So obviously you will need to check in the global system audio settings to make sure you have output set to ARC with Bitstream (Dolby). Once you confirm that, start the disc with the Atmos track and as soon as the video is playing, press square on the DS4 and check that you have this option set:
Select "Settings" > "Audio Format" > "Bitstream (Direct)".
My PS4 was set to LPCM for some reason so that’s why I was getting 2.0 stereo. Detailed instructions here: https://denon.custhelp.com/app/answers/detail/a_id/5868/~/setting-your-sony-playstation-4-to-output-bitstream-audio-%28dolby-digital-%2F-dts%29
I hope this fixes it for you as well. Cheers!