I'm guessing that the Dolby Atmos app is taking the game positional audio data as the game engine itself will take into account where everything is and normally compress it down into however many channels you have available, but in this case it's passing a more raw version of that to the Dolby Atmos software for it to reprocess it into a better representation across your headphones (because, Binaural, see virtual barber shop on youtube https://youtu.be/IUDTlvagjJA
). Audio is something which Dice already does brilliantly in their games so something like this should be very impressive. I suspect that Atmos will be best put to use in games and CGI movies in the same way that CGI 3D movies usually work better, because all of the reference data for where everything is in relation to everything else is present during creation, rather than having to be edited in by humans.
As for fake 5.1 or 7.1 on headphones, it's not something which I would bother with as it's essentially artificial processing done by usually a cheap sound adaptor. Reaper2k90 even have a headset which has 3 drivers in each headphone for "true 5.1" audio (uses 3 outputs from PC like traditional speakers) and in my opinion, the money would be better spent on a better traditional headset (I've used his briefly, wasn't especially impressive), because your head only has 2 ears, and your brain already processes that to understand 3D space, so 2 very well managed channels with proper processing is all that is required (hence dolby atmos on headphones!), it's why my HyperX Cloud 2 headset (nothing really fancy, just a decent gaming headset, with 7.1 switched off) allowed me to punch someone in the face on Titanfall 2 as I heard his jumpjets behind me as he was trying to get onto my titan, I was accused of hacking