Interesting that it all works...my experience is a bit different, but maybe I've not followed all the steps correctly.
I have a Minisforum UM480XT with AMD Ryzen 7 4800H processor. It runs unraid with a few docker containers (Overseerr, Radarr, Sonarr, SABnzb, etc) and of course Plex. I have Plex Pass and enabled the hardware decoding.
When I play a movie on my iPad and purposely downgrade from the 4K to 1080p, the movie stutters every 20sec for about 5sec. When I check the activity in Plex Server, it's states its 'buffering'. Processer hits 40-60% which tells me the real transcoding is still (partly?) done on the CPU, although it shows 'transcoding (hw)'.
I have asked a friend who has an Asrock NUC (intel CPU 1165G7) and there it playes even without Hardware decoding perfectly on the ipad (from 4k to 1080p). I have the same NUC but it currently runs my Home Assistant instance, so I'm going to swap the two.
But before I do, does anyone has any tips for checking in Plex Server if it uses the iGPU correctly?