Sonos ARC with Apple TV 4K gen3 and LG OLED evo C4

Not while using the Apple TV 4K. It uses Dolby MAT to play Dolby Atmos and 5.1 audio. Multichannel PCM is less compressed so it requires you to increase the volume to hear the more quiet sounds. 
 

If you don’t like the way Multichannel PCM audio sounds, I suggest you use a different streaming device like a Roku Ultra or Nvidia Shield Pro.

...I agree with you, but the result of the transcoding is terrible...you can create a compressed audio from a native uncompressed one, but not vice versa...it would be enough to add the audio passthrough option to maintain the formats native without any transcoding, in my opinion very harmful...anyway, thanks for the information...

The reason for this Apple TV behavior is that Apple mixes the Siri voice into the sound.

This is why passthrough ist not possible. 

Since they probably want to keep the voice overlay it is very unlikely that they add this option.

...whatever they do, the result is terrible, it is not acceptable to have to submit to audio manipulations of any kind and not be able to use the native audio...they should just insert an additional option for passthrough as happens in any other device streaming...it's a shame, because the video quality of the Apple TV Gen3 is excellent, but the audio sector with the Sonos ARC isn't good at all...to be honest, the player itself doesn't produce any particular audio problems with the receiver DENON AVRX4500H, but in this case, obviously, we are talking about a category of absolutely higher level than the Sonos ARC...

...problem solved...it's probably a strange incompatibility between the eArc and the Passtrough audio of the Oled LG EVO C4, the Apple TV 4K and the Sonos ARC Soundbar...basically, deactivating the eARC on the TV (leaving the ARC setting active), and leaving the TV audio output in Auto (not selecting the Passtrough option), setting the format change mode on the Apple TV 4K to Off (Dolby Atmos option on Yes), the Sonos ARC reproduces native audio formats exactly, including Dolby Atmos (a format that should have been unavailable given the deactivation of the eARC option on the TV)... I hope all this can be useful...😊..

I tried the above and am still not getting Dolby Atmos on the Sonos Arc Ultra. I have the same C4 TV and AppleTV 4K hardware you mentioned, and have my settings on both the same as above, but I’m still just getting Dolby Digital + 5.1 for Dolby Atmos content being played from MAX.  I’m at the point where I’m considering just returning the SONOS and getting a different Atmos soundbar.                                                                                                                                                    

...Hi, with which streaming contents have you tried Dolby Atmos???...often on Netflix they indicate support for Dolby Atmos, but in reality the stream is only in DD+ 5.1...if you have an Apple TV+ subscription, try the film "Greyhound:..." or on Netflix with the film "Kinda Pregnant"...I remind you that on Netflix you can only use Dolby Atmos if you have a premium subscription with 4K UHD...if you want, let me know which contents you tried and I'll give you my feedback...bye...

Do you have the Max Premium plan? Is it part of a bundled package?

...unfortunately no, this subscription does not exist in Italy, I'm sorry...the only streaming subscriptions that include Dolby Atmos are Netflix, Disney+ and Apple TV+...

Hi, I’m using MAX in USA, and the 3 movies I’ve tried both on the LG’s native app and the appleTV all say they are Dolby Vision and Dolby Atmos. Still the best audio  getting according to the Sonos app is Dolby Digital + 5.1, no Atmos

Do you have the Max Premium plan? Is it part of a bundled package?

MAX Premium

Is it part of a bundled plan with Disney+ and Hulu?

…no, no Max Premium in Italy...in USA you can try Apple TV+ (you can take advantage of the free trial week) usually what they indicate corresponds to the actual audio flow conveyed...on Apple TV+ many films and TV series are broadcast in Dolby Atmos...

What are you talking about? ​@Eddienyc1 is using Max in the USA, not Italy.

...I'm simply saying that if you want to test audio streams in Dolby Atmos you can try the Apple TV+ streaming service which is certainly also present in the USA...many contents are broadcast in Dolby Atmos...