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Encoding has to do with video and audio transformation from one form to another, including subs/signs is just a minor detail in that business. Filtering and other magic words that I don't even know are used to change large files into small with little or no loss of quality, etc. Being colour blind I was discouraged from even attempting to learn this part of the trade ;D
Muxing is something else: adding various video, audio, and subtitle tracks into a container, not to be confused with encoding.
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