If your system supports hw-accelerated transcoding and it’s enabled in PMS, Plex will try to transcode using the hw-encoder (allowing up to the newly added threshold of parallel hw transcodes). If there’s more streams or streams with tracks your system cannot transcode using the GPU, it’ll fallback to the CPU (again… for up to the number of specified parallel transcodes).
Keep in mind that even if a video can be transcoded using your GPU, CPU transcoding might still happen for an audio transcode.
That’s kind of unfortunate, because I would want it to work the opposite way. I would rather it do CPU transcodes first because they are usually of higher quality than GPU transcodes.
Perhaps we need a toggle to prefer CPU or GPU transcodes.
Which GPU are you using and what is the video bitrate ?
I ask because with newer iGPUs / external GPUs and sufficient video bitrate,
you can’t tell the difference unless transcoding down to less than 12 Mbps for 2160 (4-8 Mbps for 1080p)