This approach of the broadcasting "peer" sending multiple streams (with varying bitrates) to a relaying server is a neat solution. This is done to avoid transcoding on the relay servers, so it makes the servers cheap. It is superior to:

> Lower[ring] the bitrate of everyone’s streams so it doesn’t overwhelm the slow user (i.e. the lowest common denominator)

However, it's still a lowest common denominator solution with respect to what codec is being used. The broadcasting "peer" has to send using a codec that every other peer supports. Essentially that means you're stuck with the lowest common denominator codec.

If the relay server was to instead transcode, then the broadcasting peer could submit a single stream (lower bandwidth) in the best codec it supports. Then the relay server would generate additional streams in various bitrates and codecs (something this solution is trying to avoid).

So unfortunately there's still a trade-off.

The article does mention "Scalable video codecs" as a future improvement. However, using the approach described in this article, we're a long way off taking advantage of them, because whilst there's no transcoding every participant would need to support VP9/AV1.