It's possibly because Atmos requires DTS-HD MA (there's no free alternative), or because people playing on standalone hardware are more likely to support DTS-HD

It's possibly because Atmos requires DTS-HD MA (there's no free alternative), or because people playing on standalone hardware are more likely to support DTS-HD MA than FLAC. In general though, FLAC will compress to smaller than the equivalent DTS-HD MA.