I figured it out. Even though I was changing the setting on the ps4 from the main menu it wasn’t updating once the game or movie started. I had to start the movie and open the sub menu and go to settings and update the audio output from there. As soon as I put it on bitstream the movie changed to atmos output.

LFR1100
VP180HP
EP600
M3 In Ceiling x 4
M5OW
M2 - Atmos rears
ADA1500.5
M3 Outdoor Speakers
ADA 1000.8