SOLVED: Playback looks worse through Jellyfin than VLC

[TheDreadPirate]

That's what I was thinking as well. I missed the playback info button though. Now, I can see that it is indeed transcoding because "the video's bitrate exceeds the limit". The original is 7.2Mbps while the transcoded video is 3Mbps.

So I guess the next question is, is there a way to increase the bitrate limit? When I go to Settings → Playback, the max that I see for 480p is 3Mbps. If that's already the max, would I benefit from processing these MKVs through Handbrake ahead of time? I'm wondering if I'd see better results transcoding them myself rather than relying on Jellyfin to transcode them for me.

Is your client an Android TV device?  The auto bit rate detection is not great.  Most people set the "max bit rate" to the highest (120Mbps) to get around the issue you are desribing.