You usually have two options: Either you create a stereo downmix yourself. This can then be added to the multichannel mix in the Dolby encoder. This mix is independent of, for example, the 5.1 or Atmos mix. The consumer with an Atmos system hears the mix in Atmos and the consumer with an ordinary stereo system (or the TV speakers) hears the separate stereo mix. However, only the Dolby Media Encoder (DME) or the Dolby Encoding Engine (DEE) offers this possibility. (Besides, hardly anyone uses this option.)
But there are other Dolby encoders (Mainconcept, Adobe, etc.) These usually offer only the automatic downmix. With this, the LFE for the stereo downmix is automatically discarded during encoding.
The others have already mentioned it: There is something else. The bass management of Dolby. Every Dolby AV receiver has a bass management. There, the user can specify that, for example, the LFE signals should be played back proportionally from the left and right front speakers when playing the surround sound. This is the case, for example, if the consumer does not have a subwoofer (i.e. 5.0, 7.0, etc.). In this case, the signals from the LFE sum up with those from the front speakers. Conversely, signals from the front and/or center speakers can also be sent to the LFE.
The subject of LFE is quite complex. Unfortunately, not much attention is usually paid to it.
I recommend reading Dolby’s 5.1 Channel Production Guidelines. They are older, but still valid.
The example, which is also used by Dolby itself, where the LFE can be used is the famous cannon shots in Tchaikovsky’s 1812 Overture. In such a case, the overall program level might have to be reduced several dB just so the last few minutes can make the desired impact without overload.
By using the LFE channel, the orchestra can be recorded at a normal level, with some of the loudest, deepest bass of the cannons carried in the LFE channel. Of course, the main channels will still carry the cannon shots so that they will be heard from the appropriate locations and in a downmix.
Another advantage using the LFE channel when carrying explosive bass signals is that smaller stereo systems may not be able to handle such high levels of deep bass without significant stress. Since the Dolby Digital downmix process discards the LFE signal, these low frequency signals will not present any difficulty for these smaller systems. The remaining portions of the bass frequencies delivered by the main channels will convey the essential aspects of the performance when listening to the downmix. Conversely, if you mix your bass components predominantly or even exclusively into the LFE channel, you will very likely ensure that listeners of the stereo downmix will describe the mix as lacking in bass.
We should not underestimate the fact that many people still listen to movies in stereo. Atmos has not changed that. Young people consume series but also movies today mostly on their laptops or smartphones. (If we are lucky, they at least wear headphones. )