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What about having speakers on small shelves? In-wall speakers are just a serious sacrifice and limitation. There are better options. You can install a shelf anywhere.

Actually, in a 5 channel system (not counting Atmos) the surrounds should go to the side of the viewing area, not behind it. So, you have a perfect place for the right one on that small bit of wall, right in line with the grill. Then you have the L/C/R and sub(s) in the front, and Atmos...