I'm unable to set Homepods as the Default Audio Output either. Well, I can set them but then I just get a message stating the ATV couldn't connect to that room. Have reset the ATV and Homepods with no effect. I can Airplay using the long Home press and by selecting the Temporary Audio Output option but, as I understand it, neither of these will give me Dolby Atmos from the Homepods.
Not what I'd expect from Apple, this is a buggy mess.
Paul