Thanks for the feedback.
The preset on the MACBOOK was set to APPLE XDR DISPLAY (P3-1600 nits). When connected to the TV with this preset, the TV's picture gamma settings remain defaulted to BT.1886 and ST.2084 was greyed out.
I then changed the preset on the MACBOOK to HDR Video (P3-ST 2084). When connected to the TV with this preset, the TV's picture gamma settings remain defaulted to BT.1886 and ST.2084 was greyed out.
I copied the movie onto an external USB HDD and connected it directly to the TVs USB 2 port and TV picture settings on the TV now defaulted to ST.2084 with BT.1886 greyed out resulting in a much higher quality video than the macbook. HOWEVER, the audio was not as good via USB as it was through mac/HDMI......even though the soundbar displayed the same text - MULTI CHANNEL PCM.
I should add here the MKV file contains two audio tracks 1) ATMOS 7.1 and 2) AC-3 5.1.
I am convinced the USB is failing back to 5.1, which is why the sound is better via the Macbook, which I KNOW is playing the 7.1 track as I've selected it in VLC media player on the MAC. I just the sound bar displayed the text DOLBY ATMOS as opposed to MULTI CHANNEL PCM.
With both tracks, I expect to see MULTI CHANNEL PCM on the soundbar but there's no clear way of me knowing that the USB is presenting the 5.1 track and Laptop is presenting 7.1 track. Well clear way meaning visual stats. I can clearly tell the difference in sound using my ears.
Not sure why the USB is not selecting the 7.1 track by default given that the TV itself is enabled with Dolby Atmos.........but......important note here, with the USB inserted into the TV AND with Dolby Atmos enabled in the TV settings, PASS THROUGH is greyed out. I expect this because PASS THROUGH is only available when you connect an external HDMI device. Since we have a USB HDD, that option is never going to be available. i just figured the TV itself can handle ATMOS so why it doesn't just select the ATMOS track. When the movie is playing, you can go to settings but there is no option for selecting multiple audio tracks, which makes me believe AC- 5.1 is the only one being sent from USB.
In summary, both methods (MAC/HDMI and USB HDD) show MULTI CHANNEL PCM on the soundbar but the mac/HDMI sounds DAY and NIGHT better than the USB HDD. However, video wise, the USB HDD looks DAY and NIGHT better than the mac/HDMI method.