If "free" Plex can't transcode and can't stream externally...
No, I didn't say that. Free Plex cannot use hardware accelerated transcoding. It's only software transcoding in the free Plex level. And that's fine for me. Even with a Plex Pass now, I still run Plex on a Xeon-D system with no discrete graphics card, so I still have only software transcoding. But with eight cores hyperthreaded I can transcode anything 1080p or below and still keep a respectable idle power draw. I can't transcode 4K, or tonemap HDR, but I only watch that content on devices that support direct-play anyway. And you can't stream video on free Plex, but you can still stream audio. So I would still be able to enjoy my music library in my car, or walking late at night as I do now. Even with all external access gone I still get to have Plex as a video library browser with a streaming-service level presentation of titles and metadata, on all my screens within my own home. That is why I did all this. I would be without Skip Intro and Skip Credits, but those aren't the important functionality for me.
...just run something like FileZilla on your media server and use Kodi on the client(s)
I started all this as only being able to watch my media on my desktop PC, using Zoom Player with its 10-foot UI. I had a TV tuner card with gave me a good remote control (for a PC). But I wanted to watch stuff on the larger TV in the other room. I couldn't afford a second PC just for that (this was before streaming devices really took off). Next was running a DLNA server and accessing it from a Blu-ray player. But when I moved to Plex, simply having the ability to transcode and watch any media I wanted, instead of having to limit myself to what the DLNA client device supported, was a huge leap. This is years before Jellyfin existed, let alone reached the quality level it is now. You didn't even need a Plex login to use the server then.
I run a Jellyfin server alongside my Plex server today, and I would recommend anyone new start with Jellyfin. But since I paid $90 for my Lifetime Plex Pass almost nine years ago I don't have any reason to dump Plex. If this is about the ad-supported content, you can turn that off. If it's about data sharing or stupid social media features, you can also shut most of that down. I'm using third-party clients for both Plex and Jellyfin more now, so what their developers do (or don't) with the first-party apps isn't really effecting me much.