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Dear @ZTS,
Thank you for posting your question in the Microsoft Q&A forum.
Based on your description, certain video files stored in SharePoint cannot be played in the browser and show a “file format or structure is not supported” error, even though permissions are correctly configured. After re‑encoding the video, playback works, which suggests a web streaming limitation. You wonder there is any SharePoint, Edge, or related setting that allows these videos to play without re‑encoding, or this is a known limitation.
SharePoint and Stream on SharePoint only support specific video codecs and MP4 container structures for web streaming. Certain MP4 files (such as fragmented MP4 or files encoded for non‑web playback) are intentionally blocked and will show the message “This video is not supported for playback.”
There is currently no SharePoint, Edge, or Microsoft 365 setting that can override this limitation. Re‑encoding the video to a standard MP4 format (H.264 video + AAC audio), as you did with HandBrake, is the recommended and supported workaround.
For more detail information, you can refer to this article Video formats you can play on Microsoft 365
Note: Please understand that as forum moderator, my primary goal is to provide helpful guidance and support through general troubleshooting steps. While I don’t have access to internal systems or test devices required to resolve backend issues, I truly appreciate your understanding of these limitations. I genuinely hope the information I share helps guide you in the right direction, and I'm always here to assist as much as I can within my scope.
I hope information above helpful, if I misunderstand your point, please pardon me and provide more information so I can support you more effectively
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