Unplug the TV from the wall, wait a couple minutes, then plug back in.  This will force a new HDMI handshake which may straighten things out.

What happens when you toggle Dolby Atmos Off/On again within audio settings for Apple TV 4K?

Edit: this seems to be a known bug with Apple TV 4K under tvOS 15.3, but fixed for me under tvOS 15.4

So do you have the beta for 15.4? It says I have the latest update. What setup do you have?

Yes, I updated to the beta versions to see if it fixed the issue. It’s been okay for the last couple of updates.

I’m using the HD Fury Arcana as tv doesn’t have eArc.

First see the comment in your post above, which I have bolded and underlined.

You need to change the TV setting here from PCM to bitstream - it is greyed-out because you first need to switch the TV input to access the setting. So to change it for HDMI-2, first switch to that input and then go back to the TV settings and you should then be able to change it to bitstream. I recommend you set all the TV HDMI inputs to bitstream.

Hope that suggestion helps to sort the issue for you.

So update. Did the unplug and then later the pcm/bitstream switch. Those snapped things back in place where I was getting proper audio through my tv apps. Thanks for the notice on the 15.3 issue, as I am still getting weird multchannel pcm through anything on Apple TV. Guess I need to wait the month until that comes out to see if it fixes it. Still a little softer than I would expect but maybe it’s just me expecting too much. Odd observation and again maybe I am seeing it wrong but the picture looks better through the Apple TV but I never really used the tv apps before; anyone have any opinions on this?

Thanks to everyone who gave me suggestions so quickly, really do appreciate it. Really wish I could give each of you the “best answer”.