Constant Transcoding

Sorry if this is a noob question, but why does Mezzmo transcode all files even if its a native file that my PS3 can play without transcoding? I basically need to turn transcoding off to avoid it transcoding every file type and this obviously means using FF performance is reduced as is using scene selection. I've tried all the options available and the only thing to stop it from transcoding is turning it off for everything. Then, i have to turn it back on if i stumble across a MKV file.

Slightly annoying so just wondering if i'm doing anything wrong here?

thanks
Mark