M5Atom Matrix has a dedicated USB-Serial chip which is not affected by the ESP32 reset and thus is keeping the serial connection alive.
In contrast the ESP32S3 inside M5AtomS3 Lite has USB built-in (and doesn't need a dedicated USB-Serial chip). The 'downside' being what you observe - resetting ESP32S3 also resets the USB connection.
Then probably the fact that Atom S3 currently supports only tiny subset of UIFlow features should be made clearer in the product description. I bought an Atom Matrix for a DIY watering project, was fairly impressed with the device (and the whole M5Stack concept) and decided that small local display for current humidity etc would be even better. So I bought the new AtomS3 (described as supporting UIFlow development platform) and currently can't connect it neither to my Watering sensors nor the MQTT data collection server. I will switch my development back to the Matrix and will be looking forward to switch it again when the features I need will be supported in UIFlow 2