Direct Play only without subtitles

XBOX and PMS in the same network. Direct play work only without subtitles. As soon as I turn on subtitles xbox starts transcoding.
Why?

This is because currently subtitles need to be burned into the video stream. To do this the video stream and the subtitle stream are passed through the transcoder producing a new video stream with subtitles hard coded into the stream.

Thank you for explanation. Seems like XBOX app could use some developer attention.