When it shows up, click the badge (if on iPhone/Pad, etc), it brings up a lil info box (same for Atmos, Lossless, Hi Res Lossless and Apple Digital Master badges).
The info box says "Dolby Audio is a surround sound format that includes Dolby 5.1 and 7.1". Clicking the learn more tab brings you to Apple's support page for Atmos, so it's likely not set up. The only album that consistently has the tag is the Three Days Grace self titled, and when you hit play it does show the Dolby Audio tag... but honestly you couldn't pay me to listen to Three Days Grace so I have no idea how it sounds. It's also been spotted on The White Stripes Elephant, the soundtrack to the video game Skyrim, and a few others, but those tags appear and dissapear.
My bet: Apple is big on what they're dubbing "Spatial Audio", their binaural mixdown of surround. They're incorporating it into FaceTime calls (...which how would that realistically work?), and soft launched it last year for movie/tv streaming services with AirPod Pros and Max's respectively (they're also folding it into games, a few Apple Arcade games take advantage of it). iOS 15, due out in 5 days will add head tracking for music to those headphones (and as someone on the beta... it's... not great), as well as a "Spatialize Stereo" option for those headphones which will take a stereo signal (or streaming service streaming a surround signal but not in a way that latches onto the "Spatial Audio" tech), and attempt to bust it out into a binaural surround. So the Dolby Atmos launch a few months ago is "wave 1", and "wave 2" will be coming with iOS 15 with the facetime, etc enhancements, and "wave 3" will likely fall around when the long rumored "AirPods 3" (shaped like the Pros but without noise cancellation) launch, adding "Dolby Audio", and potentially more codecs. (Sony's 360 RA, DTS, etc)
Also, Hi! I've been lurking here for a while. I don't have a surround sound set up (yet, I'm in research stages of getting my first apartment and am researching decent, yet inexpensive Atmos soundbars), but I've been fascinated with audio "beyond stereo" since I stumbled upon a iOS app 13 years ago called NatureSpace that had nice binaural nature recordings. Since then I've delved deep into various ways to get surround sound in binaural, and am pleased that Apple seems to be bringing it to the masses. You all tend to find the new stuff that hits on AM faster than r/spatialsongs, plus keep me in tune with upcoming releases (interested in that upcoming Oneohtrix Point Never Atmos mix. I don't think that album is close to his best but would be fun in Atmos)