Okay so here is the screenshot from when 1917 was playing. This movie is TRUEHD 7.1
Plex server:
By contrast, i played The Bourne Legacy. This movie is DTS-HD MA 7.1.
Plex Server:
Plex Client (Apple TV 4K):
Denon AVR:
So to sum up what I have learned. If a movie is TRUEHD, Plex will losslessly convert the audio that to FLAC and then the Apple TV will losslessly convert it to PCM which the receiver sees.
If the movie is DTS-HD MA then Plex will direct play it to the Apple TV which will losslessly convert it to PCM for the receiver to see.
