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.

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.

.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.