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.
I do find myself reading and writing words in dreams quite a lot. I’ve never seen a clock though, not as far as I can remember.
But sometimes I can even remember signs with street names or banners / short paragraphs.
Dynamic lighting sadly doesn’t work tho. Light switches do nothing. For example if I turn on the lights in my bathroom in a dream, I can even hear the bathroom fan turn on, but the room remains dark. Ive heard thst this is apparently quite common though.