AppleTV and TRUE HD Audio

Server Version#: 1.31.2.6810
Player Version#: 8.16(5285)

When trying to playback a 4K HDR mkv with Dolby True HD I get the following message:

Not enough disk space to convert this item

The server is set to use RAM on my server to transcode, the video is playing back without transcoding. To watch the movies I have to manually set the audio to the ac3 track. If I playback a 1080p mkv with TRUE HD, it transcodes to FLAC

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