I am glad I ran across this thread, because it prompted me to run a few test on my own.
I am running the ATV signal through a Marantz 8802A to a Sony X940D. The Marantz has a web interface, and when I bring up the “Info” screen, I can see the resolution and color space being sent by the AppleTV 4K.
I launched the Netflix app and started a movie that I know is 1080p. I configured the video on the ATV to be 1080p SDR, which matches the movie’s resolution. As expected, the Marantz showed 1080p input, YCbCr, rec709. So far, so good.
I then switched the video setting on the ATV to 4K SDR and started the movie over. The Marantz now shows a 2160p signal, still rec709 color space. So the ATV is now up-scaling the 1080p signal.
Finally, I switched the ATV to 4K HDR and restarted the movie a final time. Now the Marantz is showing 2160p, with bt2020 color space (HDR). I checked the Sony, and sure enough, it had switched to HDR mode. So now I have a 1080p movie playing in “fake” HDR mode. Not exactly what I would want.
So, if I understand the issue correctly, in order to be successful with this new AppleTV 4K, I need to know ahead of time the resolution of the content I am about to play, and then manually configure the video output so that the content displays correctly. This is not very desirable. Now the question is—will Apple acknowledge that there is an issue and fix it, or should I return the device and wait on the sidelines? This has certainly put a damper on the excitement of a shiny new Apple product.