I’m not sure if this has been reported before since I couldn’t find any other matching articles, but on ChromeOS (running on a Samsung Chromebook), the Plex app defaults to setting the H.264 “Max” level to 5.2 (I’m not sure if this is autodetected or if it’s just a default setting in the app), which causes the issue of the player app (the actual app, not through the browser) to display an error about the server not being powerful enough to play any video because it’s attempting to transcode the stream first. This is wrong, because the videos are all set to use 4.0, 4.1, or 4.2 (in rare cases) for their H.264 level, meaning that it should be able to direct play because those levels are BELOW the “max” level that the player app is set to. There should be no need to transcode at all. Setting the player app to 4.1 resolves the issue and allows the videos to directly play.
So, it seems that the player app is trying to increase the H.264 level to be whatever it’s set to as the “max” rather than that just being what it looks for in a stream and decides whether it needs to transcode at all.
I have not tested this on Android or iOS devices to see if there’s a similar issue there.