Server Version#: 1.25.0.5282
Player Version#: web version
So after googling this issue for a while, the only option to disable transcoding is under Transcoding → Disable video stream stranscoding.
Yet plex still thinks it should transcode. FYI, I disabled subtitles on a 4k title and tried to stream it to the web app. Plex tries to transcode it.
I really wish there was an explicit option to “only ever allow streaming or direct play” and let the player fail if it cannot decode the media with a descriptive error as such.
Please, I just want to have a bit-perfect stream to my player of choice.