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So, my users transcode just fine without Plex Pass. I believe. You are referring to enabling hardware accelerated transcoding, which is a Plex Pass feature. You don’t need Plex Pass to do basic transcoding. That’s a free feature.
As for the proxied connection, I believe. You are referring to Relay. Thats such a low quality that its recommended to disable it and that’s the first thing I do on my PMS.
I believe Infuse (for the ATV4K) will be a decent workaround in the meantime, since it seems to allow remote play from Plex servers without charging, and plays stuff better than the default Plex app anyway, fwiw (like Atmos content).
You could be right about the CPU transcode vs. GPU transcode. It was a long time ago when I setup my Plex but I do recall having performance issues with CPU transcoding. Either way it's a valid point.
I had to use relay only once at a Hotel and it was decent enough but the TV they had was pretty lame so I couldn't tell how bad Relay was vs. the TV quality. Either way I got to watch what I wanted without commercials.
Never heard of ATV4K but I'll check it out. Thanks.