Better to use AtlasTexture or cut sprite up into smaller sprites?

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I got a couple huge atlases with over 1k 16x16 sprites, i also have another version with the sprites cit up into individual sprites...

Must I use the atlas to get better performance? Or is there some way to stitch together a bunch of sprites into an atlas at build or import time like in unity?

https://github.com/godotengine/godot/issues/22391

This says it was fixed and now "multiple images to be imported as an atlas":

https://github.com/godotengine/godot/commit/04847ef5f98d9a20a72286c44cc26302ec82dec5

i wonder if that is in 3.2?

https://godotengine.org/qa/1640/does-godot-generate-texture-atlases-on-export

This says you can do it in Export -> Image Groups but I do not see that anywhere?

Please and thanks.

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