As I understand it you have Bed level speakers and you have Object level speakers. Bed level speakers are anchored to the horizontal plane and are expected to be placed on the ground and ear level while seated. Object level speakers are placed above and can be moved from the top front to top side and top back. There is also an option to do Objects directly overhead and slightly to the side in rows. Bed lever speakers get direct channel information while object channels get shared ambiance and Spacial queues and are not fixed in place. This is just my rudimentary understanding. So a 5.x.x is an option for home theater setup for smaller rooms that can not accommodate more bed channels.
I don't think this is quite correct...
You have the bed level speakers and you have height speakers. Sounds can either be played through the discrete bed channels or can be defined as objects. Here is the point of difference: I think sound objects can be placed anywhere in 3d, and therefore panned between the bed layer speakers just as easily as to the height channels. (Or even from the bed layer up into the heights).
I understand, but from the interview it seemed like the positional information of individual objects is only relevant once you’re beyond 7.1.2. And they’re included in the mix of the main channels otherwise.
This isn't quite what was said in the video either. The point was that to have the ability to pan height objects forwards and backwars as well as left and right you need at least 4 height speakers.
So 5.1.4 is the minimum for a good Atmos effect.
Obviously 7.1.4 is preferred and this is probably the default for mixing.