The server that runs the bulk of my homelab does not have a graphics card. My TrueNas Scale server does as well as my desktop. The video’s are stored on the NAS and the remote shares are available on any system. So no graphics card in the server(s) is not ideal but They are beefy servers and still plenty capable of running ffmpeg but the conversion does not have to happen there.
It is not necessarily about saving space so much as it is about uniformity. And yes my server is beefy but you get 3 or 4 people all transcoding at the sane time and that beefy server will choke. As I have said I have been collecting for many years with a very large mixed bag of codecs I am just trying to clean up the mess that is my media.