You are correct, I am not sure if a trailing stop would be activated in this case, usually a trailing stop becomes a trailing take profit when it goes above the symbol price, have you tested it to see what happens?
The ATR trailing SL should use the same logic as the standalone ATR TSL, this text was taken from the product page.
If a stop loss is being managed for a position when the ATR line switches sides above or below the symbol price then the stop loss will remain on the last ATR price and no longer be managed, this is the optimal stop loss before the trend reversal.
