Yep, we are way beyond a time where the server should be able to decode and transcode to x264 as a minimum, and with the availability of intel’s arc cards with such excellent AV1 encode quality and low bandwidth in more than real time, encoding to this format should be a given.
AV1 decode is easily able to be utilized in many recent plex devices, and Intel Arc VP9 Hardware encoding is similarly super fast and efficient and decoding requirements for that on players is substantially less than AV1.
I have trialed the intel ARC hardware encoding and it is of very high quality. Even the lowly a380 has the same dual encoders/decoders as their big brothers.
Recent Samsung Exynos has hardware decode, Qualcomm since 845, Recent Firetv 4k devices have hardware AV1 decode, most desktops would manage AV1 software decode 1080p without too much difficulty.
I understand the reticence to enable HEVC x265 encode given the licensing issues that may be brought to bear, but VP9 and AV1 are patent free freely usable technology.