I am guessing lossy Atmos. No one streams lossless Atmos and I don’t suspect Apple will be a first in that department. That said, the fact that the AppleTV 4K is now the only streaming box with support for both Dolby Vision and Atmos coupled with the free upgrade of iTunes purchases to HDR/Atmos based on availability it could be the last stop for me. I have been using it since it launched last year and a nice chunk of my 1000+ title collection has been upgraded which is tough to argue. The video quality is still not quite as good as disc, but it is very close. Close enough that I could pretend to be ignorant of the differences. Atmos is the final piece of the puzzle for me. The only reason I would continue to purchase some discs is for extended versions not available in HDR on the AppleTV.
The real question as you pointed out is what this will mean for other applications. Infuse handles lossless via PCM, but that doesn’t work for Atmos or DTS:X. Whether the AppleTV will suddenly inherit lossless bitstreaming is what I want to know.