Just thinking some more. Don’t think X.org would do anything with audio. Still would be nice to know what the AVR is reporting back to the ATV. What does aplay -l return? See this post from Sam: HD Freeview audio problem in OSMC on ATV1 - #9 by sam_nazarko
If you read the entire thread it looks like a HW limitation of the ATV1…
Maybe it’s time to take advantage of the Valentine’s day sale 