You will be pushing the CPU to its max. In theory everything should be fine.
I've done it nearly daily for 3 years or so on my iMac with no problems. HUNDREDS of movies, no problem. And I use various settings that greatly increase the duration of the transcode time, like denoise for old movies that have been put on bluray (much better compression to greatly reduce the file size if you minimize the noise).
It will technically be additional wear on the CPU, PSU and cooling system. Assuming those are up to par its not a problem though.
Encode for what? If just want to play those files on your ATV there is no need for an encode, all you need to do is to remux those files. This just takes minutes.
I would imagine storage space constraints. 10 BD movies could end up being 300gb without transcoding.