The whole point of atmos is to have audio that logically would come from above to arrive from above.  There is no way for the Arc, or any other audio equipment to really synthesize that.  All it could really could really do is apply the front audio channels to the upfiring speakers at a lower volume perhaps.  I’m not really sure if the Arc does that, but it certainly doesn’t send audio through those channels in a way that does not sound natural. I do know that the side speakers due fire and play left and right channels accordingly when there is no left/right surround channels of audio.

In short, the Arc does do what it can to provide the best sound possible given the source material it has to work with, which might actually mean the upfiring speakers do nothing.

Allow me to tell you that, If you read the DOLBY ATMOS white paper, they do allow for Atmos up mixer to be able to make use of every speaker driver, call DOLBY SURROUND. By the way, this goes back to the first AVRs in the 90s. Where stereo content was up converted to 5.1 & 7.1

the fact of the matter is that Sonos ALWAYS do things have way. How can you have a product marketed for Dolby Atmos and cannot play Atmos natively from the Sonos Platform. Plenty of content from:
Apple Music, Tidal, Amazon Music and Qobuz 

Unless something has recently changed, no Sonos products support up mixing, Sonos appears to be very anti DSP in its software design. 
 

DSP is general has its issues and it's not a magic pill. There are products out there that do attempt to upmix and create surround sound out of thin air and most are only marginally effective. There is some good DSP products out there, especially most recently as big tech companies have investing into it - for example Sony has its 360 Reality audio DSP in the PlayStation 5 which up converts content into 12 virtual channels using a custom Sony design audio processing chip - this system is actually works very well with headphones. Sony also recently just launched its HT A9 sound system which is a portable wireless 4 speaker system (its 4 big speakers) and this system uses 360 reality audio to create a 12 channel Atmos experience and from the reviews that I've seen they say it's the best surround sound audio Sony has ever created and beats all soundbars. 
 

And while that all sounds great, that's a $3k sound system. As good as 360 reality audio may be, what is key is the processing chip that was built for it - most DSP is software only, like someone else here replied it's just modifying parameters if the input sound to try and trick your brain. The ARC didn't launch with any promises of any sort of basic upmixing, never mind advanced upmixing so I can almost gaurantee that the ARC will never support any sort of advanced upmixing because the processing chip inside was never designed for it