Sure, it could be done client-side in theory. In practice, the Jellyfin team consider it outside of the scope of the project, so now you're talking about building or modifying a third-party client and directing all of your servers' users to use that client. This also only works for users who have a device that can run said client.
My intention was to do it server-side in such a way that it would seamlessly work with any client
Well, Intel's been talking about killing their fab business, so this seems to me more of an attempt to stave off the "obvious monopoly" scenario where all major fabs are run by TSMC. Sorta like Microsoft propping up Apple in the 90s or Google propping up Mozilla for the last 15 years.