NeroVision checks for complaints first. If it's fully compliant, it does re-encode the source file.
But if it does find problems or incorrect MPEG-2 Flags, it will correct the MPEG-2 flags to make it 100% compliant.
We do not yet have an option to disable this, meaning to allow you to tell NVE to pass it through as is.
In the past, we had a number of customers run into failed burn attempts due to this issue, which is why we now check for proper MPEG-2 flags.
The DVD Demystified FAQ section covers this in one of the FAQs to a small degree. (Not how NVE responds, but incorrect MPEG2 flags in general)