Transcoding only when through remote access

If your server isn’t powerful enough to transcode that content, try to avoid transcoding at all cost.

Btw… Plex has added a setting to disable transcoding for such scenarios as part of version 1.18.5.2260 (Settings > Server > Transcoder > Disable video stream transcoding). However… keep in mind this will cause an error message if the client you’re using isn’t capable to direct play that content.