Some things in HW transcoding aren’t perfect. That’s why it’s limited to Intel CPUs only right now. No sense in adding everything until ALL the issues are resolved.
In your case, HW transcoding is available. The question is: Why did it try to apply hardware transcoding to HEVC to a CPU not capable of it? That’s what I will be testing and likely submitting a ticket on.
If it had correctly determined “HW can’t be used”, it would have fallen back. I can go into the OS, flip the hardware flag and deny PMS access to it after it’s used it a few times and it properly falls back just as it should. The question is: How did this instance slip through?