Just got the 4K Apple TV and I had the same issue. The entire screen goes dim. I'm using a receiver and projector system that display 4K HDR through the Xbox One with no problems. I switched back to SDR for the time being, it's unusable with that dimness.
The recent Beta software allows the Apple TB to “match” content and frame rate so you can leave it in 4K, SDR mode and it will automatically switch to HDR content when present.