One thing I haven't seen called out that could be a contributing factor is the hardware capabilities of the playback device. Depending on the codecs used in your media, there may not be hardware accelerated decoding support if the playback device is a smartphone. This may cause the plex to decide to transcode your media into a format that is supported by your playback device.
Also, hardware accelerated transcoding is a subscription based feature. Without plex pass active, the transcode will be CPU based only. The dual core CPU will almost certainly not have enough oomph to transcode anything beyond 720p, but the CPU has Intel QSV support so plex should be smart enough to use that.