If it's transcoding then that's a server error most likely saying it doesn't have enough memory to support live-transcoding. Try and force direct-playing by changing settings or as someone else suggested, use Infuse with direct-mode which avoids transcoding.
Don't listen to people saying not to use the ethernet port, recent ATVs have good gigabit ethernet ports and I've measured good performance on them in the past and I suggest the person saying that mistakenly believed you had an actual smart TV, not a device like an AppleTV.
You probably want to check out the infuse app for playback on your Apple TV instead of the regular plex client. Once I swapped over every playback issue I was experiencing on my Apple TV went away.
Do you think you could post a picture of the exact error message? Also you could check the Plex logs through the web app and you should see the exact error and what component caused it. If I had to take a guess, I'd say your uncompressed movie has something that's causing the server to transcode (TrueHD audio or a forced HDMV subtitle stream) and the transcoding process is failing.
Try wifi on the tv apparently they cheap out on the Ethernet port and it's slow. But also make sure the video is direct playing. You might have to switch audio versions most 4k files default to 7.1 surround sound that is not supported by my smart tv Atleast