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Apple has released tvOS 16.1.1 which fixes a bug that prevented the 128GB Apple TV 4K from installing apps after filling up 64 GB.
The third-generation Apple TV 4K, released in 2022, features 128GB of storage for the first time. A bug in tvOS was causing some users to only be able to access 64GB of this internal storage before experiencing the error.
It looks like the tvOS 16.1.1 update was released specifically to address this issue. The update will appear and be installed only on the third generation Apple TV 4K.
Users can wait for the update to install automatically, or start the update manually using the Settings app. Users affected by the bug should update as soon as it makes sense.
How to update Apple TV