If only the container was an issue, you would have a direct stream which doesn't impact quality, it just repacks it in a container that is compatible with the client.
You can see the transcode reason on the dashboard by clicking on the i symbol. Start playback on android TV, open jellyfin on your phone and you should see the transcode reason.
Round and round and round.
It's the same all over again. MS got a slap on their wrists with the browser choice tool they had to introduce in Windows 7.
Then everyone forgot about it and they started forcing Edge on users. Now they get a slap on their wrist again and the same will happen in another 10 years.
Don't get me wrong, it's really awesome and I'm glad that EU regulations actually have a impact. But I still wish for more, more permanent and stricter anti monopoly laws.