Transcoder quality bitrate questions.

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1. If the transcoder setting remains on 'auto' and the quality bitrate is set to 1080p 10 Mbps, does that mean that all video short of that bitrate are played as is, and all video above that rate are transcoded?  

 

2. If the bitrate quality is set to the highest 40 Mbps, does that mean that transcoded material, such as MKVs with internal subs set to display, are transcoded all the way up to 40 Mbps, or does the transcoder attempt to match the bitrate of the source?

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My guess:

1. yes

2. no idea... but it doesn't make much sense to increase the bitrate during transcoding, does it?

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