You're confusing a container format (MKV) with a video codec (AV1)

MKV is just a container like a folder or zip file that contains the video stream (or streams, technically you can have multiple) which could be in H264, H265, AV1 etc etc, along with audio streams, subtitles and many other files that go along, like custom Fonts, Posters, etc etc.

As for the codec itself, AV1 done properly is a very good codec but to be visually lossless it isn't significantly better than a good H265 encode without doing painfully slow CPU encodes, rather than fast efficient GPU encodes. people that are compressing their entire libraries to AV1 are sacrificing a small amount of quality, and some people are more sensitive to its flaws than others. in my case I try to avoid re-encoding in general. AV1 is also less supported on TVs and Media players, so you run into issues with some devices not playing them at all, or having to use CPU decoding.

So I still have my media in mostly untouched original formats, some of my old movie archives and things that aren't critical like daily shows are H265 encoded for a bit of space saving without risking compatibility issues. Most of my important media and movies are not re-encoded at all, if I rip a bluray I store the video stream that was on the disk untouched.

.mkv is just a container and can contain any encode. All my av1 encodes are .mkv files.

But the majority of my videos are in h264 for compatability, though I've been adding more av1 and h265 encodes lateley. But storage isn't much of a concern for me.

I don't reencode anything, I keep the raw bdmv rip and remuxed mkv for jellyfin. Even if the difference is imperceptible, as long as I have the storage space there's no reason to spend time fiddling with conversion when it can only make things look worse.

The future is av1. Is it worth it to compress everything asap? No. Not all devices can play av1. You will still shoot pictures and videos in 264 or 265. Can you already edit av1? Do you do that? Check that everything you own and do can work with av1. You should prefer 265 over 264 nowadays.

Is it worth it for your own videos? It depends. If you have a lot, like terrabytes lot, of your own videos. Then yes, you could save storage. But, the time it'll take to reencode and the power consumption it needs isn't worth it. Just use av1 from nowon whereever possible if you export videos instead of 265 if all your devices and clients and friends who you're sending them to can play it. I converted all old media to 265 two years ago (or so) to have everything compatible. I do not plan on converting to av1 just for storage reasons. Storage is cheap compared to the time I invest in caring about it. Converting for compatibility yes, storage no. I switched to immich and I have no files on my phone or laptop anymore.

Torrents? No it's definetly not worth it to reencode. The guys who release the files are aware of av1 and they will switch as soon as almost all devices support av1 and people scream for it. It is not worth it to reencode imo. Just redownload once it's available. You can push av1 adoption by releasing videos in av1 yourself. Ask for it. Talk about it. Spread the word.

.iso …. Storage is cheap and I want it as native as possible, that way I keep all my menus, original video and audio quality without any chance of introducing artifacts.