This is a previously reported issue and still unresolved. ASS subtitles on Android TV (Sony) doesn't render when italic
You are confused about the technical aspects of subtitles. ASS is a native format of the subtitles supported by the player. There is no “transcoding” of subtitles, that refers to video encoding.
”Burn subtitles” causes the server to render the subtitles on top of the video frames, which requires the server to decode and then re-encode the video (transcode) before sending it to the player. That isn’t a real fix, since the bug is in the Android app and forcing the video to be transcoded to burn in subtitles hurts the video quality while producing a much larger workload for the server.
