Jellyfin tries to direct stream when it should re-encode?

[Swindiff]

I may not understand how this is supposed to work, but I assumed that if a client was not able to direct stream a video the Jellyfin server would automatically re-encode to a format that was compatible.  I have a few family members that use 4k firesticks and they have noticed a few videos where the audio and subtitles are working but the video is just black.  I assume this is a codec issue?  I have managed to fix the issue by lowering the bitrate for their user account below the level of the file in question which forces it to re-encode and the video displays fine then.  Am I missing something in how I need to have this set up so that if the client does not have the required codec it forces the server to re-encode the video?
Cheers