It just gets worse:
I now say, using the Apple TV remote "set AV lightstrip to 50%" and it turns on all the lights in the living room to 50%. Of course it takes the usual two or three times for it to stop saying it can't find that device in the living room before it actually does anything.
This was perfect in 16.3. I've restarted absolutely everything. I really don't know where to go from here now. I am so tempted to scrap the whole lot.
Edit: just asked it again and it's now turned on the TV lightstrip to 100% and no other lights. I should add that it works perfectly through Siri using my iPhone and HomePods.
This is clearly an issue with 16.3.2 on the Apple TV.
Sorry, I've just realised I have kind of hijacked this thread.