[Isthatablackgsd]

It depends on the client's (the one you are streaming to) range of codec support. If you are streaming to the TV that your TV don't have specific codecs that it can decode, then it will transcode to the TV specification. If the file is in AVC (2.654) but the audio codec is not supported by the TV, then Jellyfin will transcode it. If you are watching the stream via the browser (HTML5 player), it have a limited range of codec it can support hence the transcoding. If your source file are in HEVC/AV1, browsers don't have a way to decode it. Jellyfin's ExoPlayer also don't a way to decode HEVC/AV1 and limited range of audio codecs.

If you want DirectPlay, then it best to use the external player for it. You have to set it up in the setting in Jellyfin to use the external player. For Android, Jellyfin can DirectPlay to MX Player Pro. I use Jellyfin in my Android tablet and set MX Player Pro as external player, it works flawless without shuttering.

Also I learn that it is best to enable QuickSync if you have Intel. With QS, it can transcode effectively this way.

Edit I saw your reply to other commenter. Browsers ("web-native") does not support MKV, unfortunately. If you want to run it in the browser without transcoding, the file need to be in MP4.