Ok, this article answers quite a lot! Here are a couple snippets:
Can I listen to lossless audio on my HomePod or HomePod mini?
HomePod and HomePod mini currently use AAC to ensure excellent audio quality. Support for lossless is coming in a future software update.
How to listen to lossless on your Apple TV 4K
What you need
Update your Apple TV 4K to tvOS 14.6 or later.
Connect your Apple TV 4K to an AV receiver using an HDMI cable.
How to turn lossless on or off
Go to Settings > Apps.
Select Music.
Select Audio Quality.
Select or unselect Lossless. Apple TV 4K currently doesn’t support Hi-Res Lossless (sample rates greater than 48 kHz).
https://support.apple.com/en-us/HT212183
Enjoy,
Jim