True, although in the context of "hey, here's some money to make a one-season ATLA sequel" you're probably expected to have something that feels ATLA-ish – which means that a dramatic overarching plot is hard to avoid. This is especially so since a single-season show needs to establish its setting and characters, give them some room to breather, and set up and conclude an interesting storyline all in a handful of episodes. Action plots are easier to do under those constraints.

These days there's more freedom; Avatar has ascended to cult franchise status and the purse strings are no longer held by a network hellbent self-sabotage. We could totally make Avatar: The Next Generation, where people spend most of their time standing around and discussing philosophy. You can do that in animation, as Orb has just demonstrated, and the universe has plenty of space for it.