Transcoding like that is very heavily frowned upon. A scene group would not risk their reputation like that.

I suspect what they are referring to there is the process of remuxing the file and removing extra audio streams, ie. a BD50 BluRay of "They Shall Not Grow Old" comes in at 20GB with two audio streams, DTS-HD and Dolby Digital. The remux of that BluRay comes in at 16GB and has an identical bit-rate on the video stream, but the Dolby Digital audio stream has been removed, as well as the menu graphics (though this would not apply to a WEB stream).