Atkinson still holds office. He was re-elected to the South Australian parliament and will have some say in government policy as a result. He's simply standing down as AG and is now on the backbench, ie, not holding a ministerial post. He's also a powerbroker for one of the factions, which is why he was made AG in the first place and why he held that position for so long.
From what he's said, he'll be retiring at the next election. He said that it would be irresponsible to force a by-election at this time when the Labor party held government by such a slim margin.
Atkinson has been in parliament for over 20 years. It's entirely possible that he simply wants to retire, especially if he was pushed out of the AG position, but cannot because it would hurt the party. Although it is a safe Labor seat and his replacement would win it easily at a by-election.
One very interesting thing though. His promise to remove the censorship of anonymous political comment now cannot be fulfilled because he is no longer AG. I wonder if his successor will honor that promise...