Absolutely, whatever works for you. I think its awesome to use the cheapest hardware possible to do these things. Being able to use a media server without transcoding capabilities? Brilliant. I actually thought you’d probably be able to get away with no transcoding at all since 1080p has native support on most devices and so does h264. In the rare cases, you could transcode beforehand (like with a script whenever a file is added) so you’d have an appropriate format on hand when needed.
Showstopper in the sense that it may not play natively and require transcoding. While x264 has pretty much universal support, AV1 does not… at least not on some of my devices. I agree that it is a good encoder and the way forward but its not the best when using older devices. My experience has been with Chromecast with Google TV. Looks like google only added AV1 support in their newest Google TV Streamer (late 2024 device).