Apple TV 4K: New 128 GB model cannot access more than 64 GB of storage on tvOS 16
It seems that the current version of tvOS is not ready for the most powerful Apple TV 4K. Upgraded last month to the A15 Bionic, the Apple TV 4K also gained a 128 GB storage option for the first time, with 64 GB replacing 32 GB as the streaming box's entry-level configuration. Surprisingly, tvOS 16.1 and tvOS 16.2 beta do not recognise the capabilities of the most expensive Apple TV 4K, despite its release running the former.
According to FlatpanelsHD and Macworld, both versions of tvOS recognise 128 GB models as having just 64 GB of storage. While System Preferences correctly recognises the device as being a 128 GB edition, it is not currently possible to use more than 64 GB of storage with apps and their associated data. Instead, when attempting to exceed 64 GB of storage, Macworld discovered that the 128 GB model will return 'The app can't be installed because there isn't enough space. Delete one or more apps or manage your storage in Settings'. In effect, all new Apple TV 4K units behave as if they have 64 GB of storage, regardless of which version you buy.
However, Macworld has found a workaround, although perhaps one that will only work once. Specifically, the website has determined that it is possible to push past this bug, but only if you download several apps at once when the Apple TV 4K has more than 64 GB of storage remaining. Hopefully, Apple will recognise the issue and address it before tvOS 16.2 reaches stable status because having 128 GB of storage is somewhat redundant currently.