Apple TV decoder

The Apple TV 4 has 3 settings for the audio, Auto, stereo and surround. When selecting the surround the Apple tv is decoding and send the audio to the receiver. When on auto the apple tv send PCM signal to the receiver with 2, 5.1 or 7.1 channels depending on the receiver. In plex you will se PCM on the receiver and all channels.

Infuse is not doing this and decoding is doen on the receiver.

What is the difference and what is better?

Better is subjective.

The receiver is probably very good at decoding as it probably has a good dedicated chip that was made for that specific purpose. Perhaps it is even better at the job than Infuse/Apple TV.

But I would use whichever gives you results you are happy with.