The reason they had to be formatted on a PC to be used by both was only due to endian-ness issues:

TOS was tolerant of both big and little endian FAT

While MSDOS tolerated only little-endian.

However the GEM desktop's formatting utility formatted big-endian only.

So to get a floppy readable on both you formatted under MSDOS. Or used a better formatting utility on your Atari that let you choose little endian mode.