Thanks for the heads up on that. I hadn't noticed that option (since I had been using my custom presets and never even checked).
I assume its the "Auto Passthru" setting? That's a little different than before with MKV's as it was just DTS passthru (I think...)
DTS does not play on Apple TV, period. You need to convert it to AC3 to make it work. Apple TV only plays AAC and AC3 audio formats, period.
If Handbrake has a 'DTS Passthru' it will work on other devices which support it but not on the Apple TV.