Hi @Amanda_van_Zyl - Firstly, welcome to the community 
SCRAM-SHA-256 is the default authentication method for MongoDB community edition starting in version 4.0
SCRAM is the default authentication mechanism for MongoDB. You can set the authenticationMechanisms used as part of the Server Parameters.
since I’m using the latest node driver, it tries the default SHA-256 authentication but since Atlas does not support it, it then falls back to SHA-1?
Atlas does not yet support the SCRAM-SHA-256 authentication mechanism. Please refer to the MongoDB Node.JS driver Authentication Mechanisms documentation for more information regarding the DEFAULT auth mechanism.
I would also go over some details of one of my replies to another post noted in the BadValue: SCRAM-SHA-256 authentication is disabled post as well which you may find useful.
Regards,
Jason