Yeah, sorry I should’ve specified. I was talking about sending the 4K H264 stream with the companion is so far not supported, only 1080P. I did not mean to encode the H264 on the Pi. 
Also, smaller sensor size means worse dynamic range (harsh in water) and more artifacts like chromatic aberration from the lens and such. The lens will also have to be more expensive as the crop factor makes any small artifacts from the lens are shown.
I don’t think this camera was designed with sharpness and quality in mind. It seems to be better for openCV applications so that’s probably why we don’t see much image samples of the camera on the website for comparing quality. This also make sense for using a smaller sensor because the processing work is much lighter with a smaller sensor compared to a larger one.