How does Plex handle transcoding when there are multiple versions of a library item available?

What I mean is the following…say a Movie has 3 versions:

720p @ 3 Mbps
1080p @ 8 Mbps
4k @ 30 Mbps

Now, let’s say a user has configured max quality as 720p, 4 Mbps.

Will Plex:

a) Try to direct play the 720p version or;
b) Will it pick the highest quality version (in this case 4k) and transcode it down to 4 Mbps?

I’m hoping Plex is smart enough so it’s “a” because “b” is basically the worst thing it could be doing since right off the bat it knows what versions and bitrates are available for each item so it should be smart about picking the right one to reduce unnecessary transcodes (let alone unnecessary 4k transcodes).

It will take the 720p because geometry is the best match. 3 Mbps < the stated 4 Mbps max.

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