Yes, that's mostly correct. Except, no transcoding is happening. (I'm assuming that your Streaming setting for Home is set to Original, which just passes the original stream directly through, no modifications of any sort.)
By default, Tuner Sharing is set to off. This means that each time a live TV stream is requested by your client, the client directly talks to the HDHomeRun tuner, and the HDHR sends the stream straight to your device; the DVR server is bypassed. In fact, the DVR server doesn't even know that your client is watching a live stream.
Correct. Tuner Sharing means that all HDHomeRun streams are directed through the DVR first. This has a disadvantage of introducing an extra hop: whereas before the stream would go from tuner to client, it now has to go from tuner to DVR to client. But, that extra hop can be a benefit down the road:
- If multiple clients want to watch the same channel live, one a single tuner is used. Without tuner sharing enabled, each client would consume a distinct/extra tuner to view the same channel; but with tuner sharing, only a single tuner is used to feed the DVR, which then shares that single tuner with all of the clients.
- You can use a single tuner to view a channel live that is currently being recorded. If your DVR is set to record a program, but you want to tune in to watch it live on a client, then the DVR server will send the stream to your client using the same tuner that it is recording from. Without tuner sharing, you client would contact the tuner and request a second/additional stream of the same channel.
- Visibility in the DVR server. On the DVR server's main Settings page of its web UI, there is an Activity section under the disk usage. Without tuner sharing, this remains blank when you are streaming live TV to a client. But with tuner sharing enabled, the DVR server has knowledge of all streams, so all live streams will be listed. Each client will be identified by its IP address, and which channel number/station is being watched.
No transcoding is necessary, unless you have changed the default streaming quality from Original. But yes, if it is necessary, that would be handled by the DVR.