Here is a link to a
CNET article which does a great job of explaining the often confusing ATV 4K menus for setting up your ATV 4K to stream/play content the way you want it to. Yep, Apple made the system fairly complicated with their menu options without giving us much explanation. This article is about three years old now, but it is still a good source of information and does a good job of explaining what the various video options do.
Here are a few points made in the article:
To prevent always on HDR, go to Settings --> Video and Audio --> Match Content and turn both "Match Dynamic Range" and "Match Frame Rate" to On. (Note: Turning on "Match Frame Rate" is not required, but you will likely want to do it anyway.) This will result in the ATV 4K streaming the original video in the dynamic range (SDR or HDR) and frame rate it was created to use. This effectively turns off the auto conversion of everything to HDR.
Even if you turn off the auto conversion to HDR, the menus will still be shown in HDR by default. To ensure the menus and games are also shown in SDR for SDR content, go to Settings --> Video and Audio --> Format and choose the "4K SDR" option. (Note: This only works if Match Content is set to "Match Dynamic Range.")
Selecting the "4K HDR" option with Match Content set to "Match Dynamic Range" results in HDR content displaying in HDR and SDR content displaying in SDR. However, menus and games will display in HDR. (Note: Menus displayed in HDR can be extremely bright sometimes.)
Selecting the "4K SDR" option with Match Content set to "Match Dynamic Range" results in HDR content displaying in HDR and SDR content displaying in SDR. Additionally, menus and games will display in SDR when appropriate.
This stuff gets rather confusing and if you don't mess with it for a month or so it is really easy to forget how it works. So be sure to copy the info you need to a location where you can view it in the future.