Does sprite atlas automatically decrease ram usage of textures?

lets say I have multiple 4000x4000 sprites, but almost all is transparent pixels

these huge pngs take up a lot of memory

but if I compile them into a sprite atlas, the atlas packs it nicely just into a 256x256

Do I need to do anything past this? When I build the game do my original sprites get tossed and just the atlas gets compiled into the build?

4000x4000 would never fit in 256x256

Assuming this is an error, if the visuals look fine with the atlas, you should be good.
You can compare with and without texture atlas by viewing the frame debugger

no, what i mean is that the 4000x4000 image contains only 1 pixel, the rest is transparent.

if i put that in an atlas it theoretically fits in 2x2

heres an example image, a 100x100 image that only contains a very small sprite that benefits a lot from an atlas

Ahh got it. Only way to know is to check the frame debugger and maybe memory profiler.
It’s true that the atlas system can remove transparent sections, but make sure to test properly