Transcoding while using PMS over DLNA

The reason why it is working in “real” Plex clients is that
a) those clients can do some things, which a generic DLNA client cannot do. Particularly they can communicate their playback abilities back to the server
b) the abilities of these clients have already been determined and put down into pre-made hardware profiles which are included by default with the server installation

So this Transcoding together with DLNA unfortunately has no big chance of getting implemented.