Spatial audio uses directional audio filters and dynamic head tracking to simulate a surround-sound environment, making stereo and Dolby Atmos content feel like it originates from around the listener rather than inside the ear.
Head tracking relies on motion sensors in AirPods paired with the source device, adjusting the soundstage in real time as the listener turns their head so the audio stays anchored to the screen.
The effect is most noticeable with movies and Atmos-mixed music; standard stereo tracks benefit less since there is no spatial mix data to work from.