Plex Server Build 2020

so my NAS is ds918+ and here is what i found on the plex website, trying to understand something. Is hardware transcoding something people select on purpose and otherwise its always software transcoding?? so in order to meet the standards for the files mentioned in hardware transcoding in the table hardware transcoding has to be enabled?? so without selecting hardware transcoding the files wont play correct? Because it has NO in the software transcoding.

I have a plex pass