How does Atheism work in DnD

I know that in earlier editions of DnD asmodeus worked to encourage atheism to gain souls.

Reading this fact got me wondering, how does an atheist (Someone who does not believe in the existence of a god) exist in a magical realm where people genuinely talk with the gods and the gods have an impact on peoples lives? Or is atheism in the DnD world more subtle, ie an atheist would accept that beings exist that have achieved great power but refuse to accept they are actually gods worthy of worship?