[JamesSwift]

We should be clear about software vs hardware transcoding being different things. Hardware transcoding is "free" for even commodity hardware. Yes, lower end systems might have trouble keeping up with a blu-ray remux as its source to a high-bitrate target. But you can very easily buy an off the shelf mini-pc to act as a transcode-capable server and eliminate nearly all the downsides that come with trying to avoid transcoding.

[Mixtape]

Just to supplement your point with an anecdote: my first "proper" Jellyfin host was a retired Optiplex 3020. I added a 128GB SSD through one of those silly CD drive bay adapters and threw in a Quadro P400 that I bought off of eBay. On top of that, the actual server ran Proxmox with Jellyfin nested in an LXC container. By all accounts, the machine was a janky pile of e-waste given a new, horrible life through sheer stinginess.

There were quirks (mostly self-imposed ones) to getting the whole thing set up, but it ran like a champ for the better part of a year. Hardware transcoding really does make a world of difference, even in the worst of cases.