I have no idea when exactly this issue started happening, but for a while now I have been noticing that when I attempted to play media through the Plex application on my Xbox One it would default to transcoding down to a lower quality. While this was an annoyance, I could always manually set the quality back to original quality.
Finally this week I spent a bit of time to try and work out why.
It appears that the majority of Plex clients on my network were considering the server to be a “remote” server, and so were setting bandwidth restrictions on playback. It is worth noting that there are two types of settings at play here, in the Xbox Plex application, and the bandwidth settings in the Plex Server settings which are available to Plex Pass subscribers.