Interesting — I wonder if it only displays the first reason for having to mess with the stream, e.g., if it’s really that it’s an unsupported container, video, and audio codec.
Possible to try playing an h264 mkv (maybe Big Buck Bunny)? Since your screenshot is h265 I wonder if it indeed needs to transcode because that’s unsupported (in addition to mkv).
I would bet that if you remux BBB to an mkv and play that through JF, it won’t transcode — I think it will just remux it back to mp4. Just a guess…