Handbrake & Subler and Stereo vs Surround

What's the question?
It's all by the book on your pic!
AppleTV spec movie has to contain an AAC stereo track and may contain AC3 surround track.
If present, the surround track must not be enabled.
AC3 playback on Mac - OS X doesn't have AC3 decoder. It used to be Perian, which is now defunct in 10.9 (unless you have QT 7 installed).

 

Track attributes are set appropriately. As long as your connections, appletv, receiver are set correctly you'll get DD. Your receiver will indicate if it's playing DD or not.

 

My understanding is the checkboxes are what plays by default. But the Apple TV plays the surround if Dolby is enabled in settings. Either way, the way you have it is correct.

 

On AppleTV you can select which audio track to play, along with subtitle and chapter selections.
If enabled in settings, the DD track in your preferred language is selected by default on playback. But you can always change and hear-see the difference.

 

Wow! So the ATV cannot downmix to Dolby Prologic itself and you include a second stereo track? How lame!

 

What's lame? The movie standard is meant for all iOS devices. So basically the same movie plays back on an iPad or iPhone.
You can have a movie with AC3 track only, but these will play mute on iPads and iPhones.
Also, as such, having the device to do as little CPU intensive tasks during playback as possible, is the best way to go. Esp on a portable.
And last but not least - they are all optimized to iTunes ecosystem, so the average user doesn't even need to know or care. All media downloaded from iTunes plays as intended, with more effort made on production side and leaving the playback side as lean as possible.