You are correct there. If a user does not have an Atmos decoder they only get 'base' 5.1 or 7.1 depending on the channel encoder config above.
Also: My Denon AVR X7200WA needs a full reset about once a year as it gets 'stuck' in a mode that doesn't recognize Atmos. It gets stuck in 'stereo' and not play multi-channel FLAC files in 5.1, only as stereo about once a year or so. I've got no idea why as I never change any AVR settings. Its always left as is and I only ever switch inputs and change volume. No firmware updates available for about 3 or 4 years now.
Also: My Denon AVR X7200WA needs a full reset about once a year as it gets 'stuck' in a mode that doesn't recognize Atmos. It gets stuck in 'stereo' and not play multi-channel FLAC files in 5.1, only as stereo about once a year or so. I've got no idea why as I never change any AVR settings. Its always left as is and I only ever switch inputs and change volume. No firmware updates available for about 3 or 4 years now.