Every time I try to watch HDR movies on my TV from my local Plex Media Server, it tells me the colors are going to be distorted unless I subscribe to Plex Pass. Will Plex not play HDR movies properly without it?
If you can Direct Play the file on your TV, the colors may be OK.
But as soon as the server is forced to transcode the video, the colors may turn grey-ish.
OP, do you have a TV that supports HDR?
Yes I have a Samsung TU7000 UHD.
Is the only way to see if a movie is being transcoded or directly played in the server logs? I looked it up and there used to be some way to go into activity and click in the info icon, but the settings have changed since then it looks like.
It should still be visible in the Plex Dashboard.
(but I’m not sure if the detail view is exposed to users without a Plex Pass)
You could employ Tautulli to get more details information. But installing it is quite involved.
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My father has the same TV. In Plex on the TV make sure the quality settings are set to MAX/High Quality / Direct Play for Home and Remote streaming. That will guarantee it plays direct, now the only problem here is if you have some media that the TV cannot play directly, it WILL have to be transcoded, but I haven’t run into that too much.
I do have Plex pass and my father streams remotely from me so he will never see the pop up, but, a question, when you get the pop up can you still play the video? Are the colors washed out (kind of dim and muted) or does it look okay? If it looks fine, it should be playing in HDR then.
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The video is playing direct stream, but the audio is transcoding. Is that the problem? The audio is Opus 7.1.
Who does that? 
There are very few hardware players (yet) which understand this format.
It might be possible that your TV cannot recognize the HDR content in the video stream if it is remuxed by Plex server (in order to integrate the transcoded audio track).
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