Atomic in software refers to an operation that cant be interrupted because it happens in one step. This one of the big selling points of atomic or immutable distros. Your system will not be left in a broken state by cancelling an update because updates do not take multiple steps, unlike traditional distros.
Fedora has pushed for the change by rebranding their immutable distros as Fedora Atomic Desktops, and these are likely the most popular immutable distros. Bazzite’s homepage also describes the distro as atomic, but never mentions the term immutable.