The meeting was supposed to be a brainstorming session for a 2600 game related to some Warner film that was coming up. It did not go well. The tone in the room from the programmers was that everything on the 2600 had been done, and that the platform had been tapped out. The marketing folks just wanted pixels on the screen and didn't give a damn about the content. I think it might have been the Philip Morris guy's first exposure to the toxicity of Atari marketing and the jadedness of the Atari programmers; his eyes just kept getting bigger and the smoke started coming out of him faster as the meeting wore on.
In the end, I think that a programmer and an artist were sent off with some notes and told to "go think about it some more," and that's the last anyone ever heard of that project. Less than six months later Atari was essentially gone, split into the coin-op group, and Jack Tramiel's Atari Corp (which shipped the Atari ST less than a year later).
Most 2600 games were crap, and consumers knew it and stopped buying terrible games. I don't blame them. Atari made some boneheaded decisions with its new consoles (the non-centering joystick on the 5200 is a classic Atari move). In the spring of 1984 the company was losing several million dollars a day (2M? 3M?) and wasn't a sustainable business, given the market and its burn rate.