Indeed, the Bible is a literary work (fiction).Atheists appreciate the arts as much as any. The Bible, as are all religious texts, works of literary art. As an atheist I can appreciate The Bible as a literary work of art, along with the stained glass windows, cathedrals, chants, and so on.
Nonetheless, to say that religion is art, is
to ignore that religion is so very much more.
Ask a Christian what Christianity is.
They'll describe beliefs. They won't say art.
(I've actually had such conversations.)