This has been a bug for a while, as seen on other (now-closed) forum posts. I ran into it again this morning with my daughter when trying to get her iPad to stream a 1080p video from my NAS-based Plex server, over our local network’s WiFi. Changing any of the settings resulted in only being able to stream the video in standard definition (480p).
I have the same issue, it really shouldn’t be too hard to fix.
This problem has never been solved
