Blu-ray transcode to H.265 using Intel Quick Sync Video Blu-ray transcode to H.265 using Intel Quick Sync Video

I just started a process of transcoding about 100 video discs (with DTS-HD Master Audio on passthrough) from my collection of Blu-rays and want to store them for backup purposes solely.



Source video codec: Advanced Video Codec at profile High@L4.1.

Target video codec: H.265 using Intel Quick Sync Video.



Hardware being a new laptop with:


CPU: Intel Core i7 7700HQ (Kaby Lake).
GPU: Intel HD Graphics 630 integrated in the CPU, capable of Intel Quick Sync Video hardware encode of H.265.




I do this with HandBrake software version 1.0.7 under Windows 10 Pro.

In short I have applied Constant quality with RF20 and Quality preset for the video.

Originals are all at fixed 7.5 GiB size (it is a series on a Blu-ray Double-layer, so on 1 disc there are 5 episodes).

The sizes of my encodes are usually around 3 GiB +/- 0.5 GiB.

That is about 40 % of the original size overall.



Problem


Media Player Classic - Home Cinema plays the video using Native DXVA2 with some unexpected effects, I am unable to describe it, so here's an image in 4K UHD:


I own a license for PowerDVD 17 Ultra, it plays the video just fine, but it does play the video only, not playing the audio at all.
Only VLC Media Player plays both video and audio well.




Question

Could anyone point me to the right direction as to if I am doing anything wrong?

Or are these effects of Intel Quick Sync Video normal?
Wrong container format (MP4)

I omitted the information about the container format. I used MP4 in preliminary tests in an effort to increase compatibility with portable devices.

It did not cross my mind that this would be the cause for the missing audio in PowerDVD 17 Ultra player. So the container has been changed to MKV. It did not, however, change anything on the artifacts in Media Player Classic - Home Cinema.



Probably buggy implementation of Native DXVA2 in Media Player Classic - Home Cinema

Thanks to Mulvya, we have found a work-around (not a solution). It seems to be buggy implementation of Native DXVA2 in Media Player Classic - Home Cinema. Switching to Video Mixing Renderer 9 (renderless) works well.