Problem with Dolby Atmos and PS5

Problem: playing a dolby atmos disc on ps5. When I start the movie, my soundbar briefly shows "DOLBY ATMOS". After a second, the soundbar switches to "TV eArc".

Setup: Ps5 -> LG OLED C3 -> Samsung soundbar

Ps5 settings: Output device: HDMI Device (AV amplifier) HDMI device type: AV Amplifier (tried Soundbar but didn't change anything) Audio Format (Priority): Dolby Atmos

Tv settings: Sound out: HDMI(ARC) Device HDMI Input Audio Format: bitstream Digital Sound Output: Pass Through eArc Support is enabled

Soundbar model is Samsung Q-Series HW-Q60CF 3.1.2 Ch Soundbar with Subwoofer (2025)

In the disc movie settings, dolby atmos is selected as well as clicking the triple dots for audio format which I selected bitstream.

What am I doing wrong? I want to avoid direct connection between ps5 and soundbar so I can keep 120fps for gaming.

Thanks!