It does, but if you feed it it's own exact native format, it doesn't have to transcode. So you have a couple advantages that way. One is that you have smaller output files, and the other is that you can see exactly what you are getting before deployment.
I typically upload in the youtube 4k standard, which maxes out the possible delivery spec from the platform. SP is native 4k, from a 4096 width base.
Youtube is a bit limited when it comes to quality, but if you get everything else right, you can get a pretty strong final image anyway.