Plex Media Server already detects and stores the bitrate/resolution/ect. I thought it would be useful if it auto selected the correct file depending on the select quality in the client/server restrictions. Obviously if there is already a bunch buffered and a client seeks within that range that would need to be discarded if changing files (which is unlikely if they are already in a file seeking, I would think).
The reason for this is simple: I transcode my 4K content (which my hardware can not do in real-time) via Optimize and my users need to explicitly selected “new” version or they get buffering issues. If it just did this automatically my less technology-inclined (read: parents) would have to write me fewer confused messages about it “not working.” It is the same issue every single time but they can not seem to figure it out…
Another reason would be to put less load on the server. Transcoding 720p down to 480p (for people on mobile concerned about data usage) would be better than transcoding 1080p down to 480p if such a file were already available.