Jellyfin with Infuse Transcoding Questions

Hey there! I am new to using Infuse, and I currently just have the files on my Mac and use SMB to bring them to my ethernet connected Apple TV 4K (love this!). Now I am curious about connecting to Jellyfin as a server on my Mac to do some testing before buying a NAS to do more.

My goal is to understand if I can host my files in Jellyfin and then watch them in full direct quality in my home on devices like my Apple TV 4K, but then have a transcoded version when I am away from home if I wanted to stream from my phone for example. I did read this article here, which I think answers some of this but want to confirm some details. If I do decide to transcode, what happens specifically to the audio and video? I get that at some level it will have to lower the bitrate, but does it remix audio to stereo? Is that a forced behavior, or can you actually rip a lossy format like dolby digital in addition to the lossless version when getting the file from the disc and then have it downselect to that + 1080p video? Any specifics here would be awesome, thanks for reading!