My TV accepts 120Hz, I want to get my money's worth in hertz dammnit!

For real though, 120 is nice even just for navigating UIs smoothly. On top of that, 120 is a nice multiple of 24, 30, and 60. So the device can just output 120Hz and skip frames as needed depending on the source content frame rate.

You don’t want movies going from apple tv at 120 hz: it is a tremendous bandwidth at 4:4:4 color and can introduce banding and other color issues. Because even if apple tv manages to output that with 100% quality, tv may not be able to be fast enough to “chew” through that. At this rate priority is to show “something” fast enough.

ie outputting 24/25/30 is completely fine: tv will use corresponding multiples of frames by itself (120 for 24, 50 and 60 for 25/30, etc.)