On the TV, set HDMI Input Audio Format to Bitstream, keep Digital Sound Out set to Pass Through, and make sure eARC is enabled. 

On the Xbox, try setting HDMI Audio to Bitstream Out OR 5.1 Uncompressed. Set Bitstream Format to DTS Digital Surround.

FYI… the Tenet UHD disc has a DTS-HD Master Audio track, not a DTS:X track.

https://www.blu-ray.com/movies/Tenet-4K-Blu-ray/269861/

Thanks for that suggestion. I’ve checked and the Lg tv settings were already set to that. 

I don’t have an option on the Xbox to set HDMI audio to bitstream out or uncompressed but I noticed in the Sonos app, it shows as ‘unsupported audio format’ when the film starts playing. I was able to find a setting in the tv settings where I changed digital sound out to PCM and that allowed Tenet to play in DTS via the Xbox but unsure if this would then not be true Dolby Atmos on the Xbox?

On the Xbox settings, what options do you have under Speaker Audio > HDMI Audio?

When watching the Tenet UHD disc, these are the three possible audio formats you want to see displayed in the Sonos app:

1. Multichannel PCM 5.1 (or 7.1) - This is the best quality audio you can get from the Tenet disc.

2. DTS Surround 5.1 

3. Dolby Digital 5.1 - This can be achieved by setting the Xbox HDMI Audio setting to Bitstream Out and setting Bitstream Format to Dolby Digital.

You cannot get Dolby Atmos from the Tenet disc because it is only encoded in DTS-HD Master Audio. With certain settings, the Xbox can convert the the audio to “Dolby Atmos” but it isn’t true Dolby Atmos audio.