Yes, they atlas into a larger texture, but as far as I know, it still takes the 0->1 UV spaces from individual meshes and just lays them out in a grid next to each other to form the atlas. The sizes of the “cells” are based on LM resolution. So a 256^2 tile would be the size of 4 128^2 tiles put into a square. I don’t think it actually arranges and optimizes a “master” uv atlas where it accounts for everything in the scene and optimizes it all at once. So if you had a mesh, where half the UV space was empty, it would still appear on the lightmap atlas; within it’s little cell of the atlas.