Apple TV shares an issue common to all mp4 profiles that use AAC audio. The default audio bit rate is set at 448 kbps which prevents the encode from completion. From the edit screen click the audio channel (lower left) select stereo it will change back to Dolby ProLogic II then select 160 kbps and give that a try.
See this post, different mp4 profile but uses AAC audio so it applies:
See this post, different mp4 profile but uses AAC audio so it applies:
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