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You can get an intel arc a310 for ~$90 and it has absolutely insane transcode performance, so depending on how large your library is it might even end up cheaper than buying more storage to just live-transcode everything.
Or if you have a 7th gen or newer Intel CPU with integrated graphics, those work great too. Support for 10 bit does require a later model CPU though.
I suspect the delay would still be longer than a Youtube like implementation which may need to switch transcodes multiple times, but that's probably unrealistic at this point anyway.
Transcoding everything to AV1 could be a solution too, since high resolutions can look quite good at low bitrates, so you could limit it to 5mbps or 10mbps for any resolution and be done with it. But I'm not sure Jellyfin supports that, and at least from the UI it doesn't give you particularly fine grained control over resolution/bitrates. Perhaps having a secondary library of just AV1 transcodes that you handle manually (perhaps even using a software encoder) could be an option for some.
The client side is also an issue, with not that many devices supporting hardware decoding (although I've found it's fast enough in software with most modern smartphones at least).
if you're switching between formats yeah it's going to need to start over on the transcoding. If you don't it's actually better because it just caches it on disk. From that point it's basically native.
Jellyfin does support limiting external network speeds, and individual client speeds, so if you setup your transcoding correctly, and the clients support those codecs, it'll work.