It is reported that latest tvOS 16.1 update that prevents Apple TV 4K 128GB from using more than 64GB of storage. As soon as 64GB of storage is used, tvOS prevents users from installing new applications from App Store.
It is also reported that latest beta does not fix the issue as well.
Developer:Beware of the issue, remove unused apps and content when needed.
QA engineer:Beware of the issue, remove unused apps and content when needed.
PM/DM:Beware of the issue. Consult users, if reports are sent.