in other words if I have surround back speakers does it mix the side surround and back surround into one?
If the source material is 7.1.x or higher, yes.
The total sound output in Atmos or other spacial formats will consist of the sum of the discrete channels (much like traditional surround) and the object audio sound. In a traditional mix (non-spacial), there are just the discrete channels, no objects.
As for the discrete channels: A simplified way to explain it is that the audio information in each
configured channel is subtracted from the total mix and the remainder is assigned to the most relevant channel(s), based on information about channel pair and panning. So if you play back a mix containing channels that your system is not configured with, rather than omit the sound from the non-configured channels, the sound will be played by different (configured) speakers. Where the sounds will end up depends on the audio itself and the algorithm with which this process ("folding") takes place. But in the case of rear surrounds being absent, it's a fair assumption that most of what they were supposed to be playing is sent to the side surrounds instead. On the other hand, if you had a 6 ch system (a rear center), it might behave very differently by "gathering" the sound directly behind you instead of pushing it to the side surrounds). Especially as in some formats the rear surrounds were mono anyways.
But it's a good example of the advancement of spacial audio, because in this example, if you don't meet the channel configuration of the mix, in scenario A the sounds will be pushed up to the side of your head and on scenario B it will be even more concentrated directly behind you, depending on which layout you have, even if both are legitimate layouts, albeit different between DTS and Dolby. Hence also why Dolby and DTS mixes may treat the lack of surround rears differently.
This logic works the same whether you have only 2 ch, 3 or whatever, and its simple goal is to ensure compatibility by making sure all the audio actually gets played, even if you're "missing" speakers. Even if it may occasionally make for a slightly odd experience where sound is coming from elsewhere than intended, it's still considered best for the user to actually hear the sound.
As for objects, the receiver/decoder will dynamically assign them to the speakers in the configured layout that best matches the azimuth, elevation and size properties of the audio object. So obviously this will behave much more accurately in different channel configuration, providing speakers are placed where the receiver expects. This is essentially a large part of the point or progress that spacial audio represents, and also why it's so important to get the speaker layout right.
So; objects will use whichever speakers it should out of those available, while the discrete channel information is folded by predetermined rules to achieve the best compromise expected.
You can test this, because it depends on the configuration in your receiver. So if you playback some passage in a 7 ch movie a few times and pay attention to the sounds, and then replay with your receiver setup for 7 channels, you should notice sounds missing (because the receiver is now sending them to the non existing, but configured, surround rears, and also subtracting the audio from the "remains" on the basis that to the receiver, the sounds are assigned properly to the speakers).
You can also try the same with a spacial mix like Atmos, and see that while some sounds "go missing" in this test, objects will still fairly similar. And than the "rest of the sound" will still behave as above.
