Thanks for this explanation, it’s the way I’ve been rearranging channels and the UI makes sense to me. I have two AppleTV’s though, and it’s not working that way on one of them. As I described, it’s losing channel focus after one position move, I have to select it for each move. The big difference I should have realized and is probably very important is that this AppleTV is running the beta of tvOS 14.3. The other one, where rearranging channel icons continues to work fine, is still on tvOS 14.2. Both are running the latest beta of Channels DVR.
That’s probably what I get for mixing betas with betas. Anyway, hopefully this is helpful information, even if it’s not directly on topic.