im not meaning i want atmos on ps4. i mean in order to have to best sound positioning in games if i have to switch to 7.1. because i know that in a 5.1 setup, if we set 7.1 on ps4 that will be worst than 5.1, while in movies is different. even if we have a 7.1 source (a 7.1 DD+ track for example), amp will downmix to 5.1 and all will be fine. now, considering atmos speakers is considered "presence" and not "surround", i think the correct setting its still 5.1. i think that it works in this way:
5.1 setting on ps4: sound will be of course 5.1, then amp will create sound for atmos speakers
7.1 setting on ps4: first a downmix from 7.1 to 5.1, then amp will create sound for atmos speakers
meaning in 7.1 we have an additional step that also lowers quality of audio positioning (as i said above)
i'm pretty sure of this theory, however i'm here asking for confirms
anyway, bitstream/LPCM have nothing to do with what i'm saying, but maybe you re referring to blurays on ps4. in this case i have no idea as i dont use it for movies and i dont even know if my ps4 pro supports 4k blurays