Yes, assuming you speak about h.264 material, the raspPi 3 will not be able to transcode 1080p material that has a non-trivial bitrate. (If is has, there is likely be no need to transcode.) The raspPi 4 will put that limit at a higher bitrate, but in view of the many other factors involved, it will not be possible to specify a definitive value.
It could be 1.5 mb/s for a 3 and may twice that for a 4. But it also depends on other encoding details how resource intense it is to decode the original. And the new encode will have a very limited quality.
I use a Pi 3 as a Plex server with a small (480x320) display attached. I am able to watch 1080p60 3Mb/s videos in a browser on the display. Obviously the encode is at a much reduced resolution so will be “easy” but the original still needs to be decoded.